5 Trends in the Hybrid Car Market

Many buyers are eager to have a more environmentally friendly vehicle, but aren't quite ready to make the jump to a fully electric vehicle. That makes a lot of sense if you live in an area where the charging infrastructure isn't ubiquitous yet.

As a result, consumers are increasingly looking to hybrid vehicles to fill the gap between efficiency and practicality. Hybrid cars have been around for a while, but an increasing amount of vehicle options and incentives makes them more appealing than ever.

Here are five hybrid trends that are making these vehicles popular and why you might want to shop for cheaper car insurance if you buy one.

1. The government may help you buy one

One of the most important trends right now is the availability of a government tax credit for some hybrids. The federal government offers a credit of up to $7,500 for certain plug-in hybrid vehicles (PHEV). It's worth noting that hybrids that don't plug in aren't eligible for the tax credit.

A handful of new PHEVs, including vehicles from Ford, Lincoln, Chrysler, and Jeep, qualify for a full $7,500 credit. The good news is that you can also still get partial credit for used hybrids. Two dozen carmakers selling about 60 used hybrid models qualify for the used hybrid tax credit of $4,000. You can search for which new and used hybrids are eligible for the credit on the U.S. Department of Energy website.

2. Hybrids are gaining market share

According to data from Wards Intelligence, non-PHEV hybrids accounted for 7.6% of all new vehicle sales in the U.S. in 2023, up from about 3% in 2020. Meanwhile, PHEV sales accounted for nearly 2% of the market, up from less than 1% in 2020.

And there's no sign that hybrid demand will cool down any time soon. According to Reuters, hybrid vehicle sales were five times higher than electric vehicle (EV) sales in February, and carmakers expect hybrid manufacturing to account for 20% of total light-duty vehicle production by 2025.

3. There are more hybrids in popular vehicle segments

Crossover vehicles, typically defined as small SUVs, are the most popular type of vehicle in the U.S. and account for nearly 50% of all new vehicle sales. And hybrid makers have taken notice.

According to the U.S. Energy Information Administration, automakers increased hybrid vehicle models in the crossover category last year, helping them tap into its popularity.

Other popular segments, like pickup trucks and larger SUVs, are also experiencing a surge in hybrid demand. A PHEV version of the Jeep Wrangler accounted for half of all Wrangler sales in the second half of 2023, and Ford's hybrid version of its Maverick pickup truck makes up half of the model's sales.

4. They're more powerful

Hybrids were once thought of as vehicles that sacrificed power to gain efficiency, but that's not the case any longer.

Consider that the latest version of Toyota Prius, the quintessential hybrid, now has 194 horsepower on its base model, a 60% increase from its predecessor. And it doesn't even sacrifice its miles per gallon to reach that. The new Prius gets between 49 mpg and 57 mpg (depending on the model), which matches the previous version.

Hybrid SUVs are also flexing their muscles. The base Jeep Wrangler PHEV makes 270 horsepower from its gas-powered turbocharged engine, but the power jumps up to 375 horses with its battery.

5. They have impressive battery-only ranges

One benefit of many hybrids is that they can drive short distances using just battery power. This is ideal for people who make short trips around town and want a vehicle with fewer carbon emissions.

The good news for buyers is that the range for battery-only power for many hybrids has expanded. For example, the updated Prius has a larger battery that gives it an all-electric range of up to 44 miles, compared to its predecessor's 25-mile range.

Even larger, more powerful vehicles have respectable ranges. The PHEV Wrangler gets an estimated 21 miles using just its battery. These aren't comparable to EVs, of course, but they're still impressive distances and, in the case of the Prius, a significant increase in distance.

One thing to keep in mind before making a hybrid purchase

With more crossover hybrids available than before and the government incentivizing hybrid purchases, now could be a good time to buy one. Just keep in mind that car insurance for hybrids and EVs is usually more expensive than gas-powered vehicles.

This is partly because hybrids have more complex systems than traditional vehicles, and their batteries can be expensive to repair or replace when damaged. To help keep your insurance rates from jumping higher, it's a good idea to compare insurance rates. Shopping around and getting a few quotes will help ensure you find the best deal.