Will 2024 be the year of the hybrid?

While U.S. EV sales were up 5.9% year-over-year in 2023, many of the dealers I talk to on a daily basis say that EV adoption is moving at a snail's pace. And that's because EVs are not necessarily the best choice for every consumer.?

Some of the concerns I hear…

• Public charging infrastructure continues to disappoint
• Range limitations cause anxiety
• Many buyers are getting priced out of the segment altogether

But you know what type of vehicle COULD work for every consumer? The hybrid.

It's the best of both the electric and ICE worlds.?

In fact, hybrids are selling faster and at less of a discount than both EVs and ICE competitors, according to Edmunds data.

Edmunds also found that the hybrid market share increased to 9.7% in November 2023 from 4.9% the year prior—99% GROWTH! Over that same time period, EVs increased just 25% in share.

And manufacturers are catching on. OEMs offered more hybrid crossovers than cars last year, making good use of the country's most popular vehicle segment.?

Speaking of OEMs, remember when Toyota kept getting a ton of flack for not following the herd and going all in on EVs? Well, it looks like their approach is paying off.?

Toyota raised its forecast for hybrid car sales from 3,868,000 to 3,875,000. This is out of a total of 11,230,000 cars it expects to sell by the end of March (the end of Toyota's fiscal year).

Recently, I had the pleasure of interviewing Jack Hollis, executive vice president of Toyota Motor North America, who shed some light on this topic (coming to CBT News soon).

“On the Toyota side, we still don’t even have a five-day supply of any of our hybrids … that’s an interesting number—a five-day supply of ground stock. Lexus, I think, is under 12 days. When you look at that from where the hybrid market is, and with plug-in hybrids having even less day supply, it shows what the consumers are asking for and we’re doing our best to provide it to them.” — Jack Hollis, Toyota

Now, let’s take a look at Ford.?

Ford's EV sales gain in 2023 was driven by the F-150 Lightning, which had a 74% sales increase compared to the prior year's fourth quarter. And a 55% increase for the full year.

Here's the kicker—the company is still losing cash on each EV that it produces. In fact, Ford previously estimated its EV business unit would lose roughly $4.5 billion in 2023.

Meanwhile, Toyota's annual profit should be around $30 billion at the end of March.

Toyota also made a strong showing on Consumer Reports' top vehicles of the year again for 2024, with four models making the list. Can you guess what they all have in common? That's right—all hybrids.?

If I were a betting man, I’d put all my chips on hybrids this year, but I want to hear YOUR thoughts. Feel free to send me a message letting me know what you think.

Until next time,

Jim Fitzpatrick