A growing number of American car buyers are turning to hybrid vehicles to counter the recent spike in gasoline prices resulting from the conflict in Iran, as indicated by recent industry sales data and reports from dealers.
According to data from research firm Motor Intelligence, hybrid sales in the U.S. surged by 37% in the two months following the onset of the Middle East conflict at the end of February. This growth outpaced the overall car market, which saw a 15% increase during the same period.
Despite gasoline prices in the U.S. surpassing $4 and reaching a four-year high in late April, fully electric cars have not seen the same level of consumer interest, as reported by the American Automobile Association.
Electric vehicle sales in the U.S. only saw an 11% increase in the two months following the conflict, lagging behind the broader sales trend, according to Motor Intelligence figures. These sales numbers remain significantly lower compared to a year ago, following the discontinuation of a $7,500 federal tax credit last fall.
Contrary to the U.S. market, electric vehicle sales are booming in Europe amid higher fuel prices, driven by the availability of more affordable EV options in a region with stricter emissions regulations.
In the United Kingdom, electric vehicle sales surged by 79% in the two months following the Iran conflict, outpacing the broader market trend. Similarly, Germany experienced a 39% increase in fully electric car sales during the same period.
Hybrids Gaining Popularity Among Consumers
Analysts and dealers attribute the increasing preference for hybrids among U.S. shoppers to several factors, including their lower cost compared to EVs and the wider variety of hybrid models available. Additionally, the familiarity of hybrid technology and the convenience of not needing to change daily routines, as required with electric vehicles, have contributed to their appeal.
Kevin Roberts, the director of economic and market intelligence at CarGurus, noted that interest in hybrids was already growing before the rise in gas prices, with the surge in fuel costs further boosting consumer interest.
Data from online marketplace CarGurus reflects a growing interest in both hybrids and electric vehicles. In April, 14% of vehicle searches on the platform were for hybrids, up from 12% in the previous month, while EV searches increased from 3.4% to 5%.
Brad Sowers, a car dealer in St. Louis, highlighted that customers are becoming more budget-conscious, with hybrid vehicles accounting for a larger share of sales at his dealership in April compared to March.
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