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Planet


THE HYBRID-CAR DILEMMA

Americans are falling in love with hybrids. Why don’t car companies want to make
them?

By Patrick George

Illustration by The Atlantic. Sources: Getty.
December 7, 2023
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Michael Treiman is something of a professional electric-vehicle evangelist. As
the vice president of sales for ChargeSmart EV—a company that sells electric
charging stations, mostly to businesses and municipal offices—his job is to
convince people that EVs are the future, and that it’s time to start planning
for them. But on his personal time, you won’t find him in an electric car. Or,
rather, a fully electric car: He owns a 2022 Chrysler Pacifica plug-in hybrid.
For his family of five, he told me, none of the few three-row electric SUVs for
sale right now can match what the hybrid minivan can do. With the Pacifica’s
small battery that powers the car for short trips and boosts its MPG, “we have
gotten over 1,500 miles out of a single tank of gas,” he said.





The humble hybrid is having a moment. While this year is shaping up to be the
biggest year for EV sales America has ever seen, it has also been marred by
staggering production challenges and uneven demand from consumers. Americans are
still wary of electric vehicles’ higher prices, limited battery ranges, and
inadequate local charging infrastructure. As a result, some carmakers are
dialing back their electric sales goals, battery-plant plans, and even the tough
love they once had for car dealers reluctant to go all-in on EVs. Meanwhile,
hybrid sales are growing at a rate that slightly outpaces EV growth, according
to the U.S. Energy Information Administration. Hybrids now make up nearly 10
percent of new car sales, a proportion that’s more than doubled since 2020.
Unlike EVs, hybrids burn gasoline and create tailpipe emissions, but they
generally create far less tailpipe pollution than their purely gas counterparts.
The latest Toyota Sienna minivan, for example, comes only in hybrid form and has
nearly half the CO2 emissions of its non-hybrid predecessor.



Given this surge in popularity, you might think that every carmaker would be
eager to offer more hybrids to customers who are looking to lower their carbon
footprint but who feel unable to make the full leap to EVs. Nope. Enter what you
might call the hybrid dilemma. Faced with enormous costs pivoting their
businesses to make EVs, strong sales for gas cars, and shareholders who demand
profitability, the auto industry can’t decide whether hybrids are a bridge to an
all-electric future or a dead end. At some point, Americans may still want
hybrids while carmakers have already moved beyond them.





The problem carmakers face is that hybrids involve all the complexities of
internal combustion and battery power put together. Building them “takes a lot
of time and a lot of money,” Sam Fiorani, the vice president of the industry
research firm AutoForecast Solutions, told me, “but a lot of their money is
focused on electrifying vehicles. Diverting some of that money back into hybrid
powertrains slows your transition to where you ultimately want to be.” In 2021,
General Motors alone announced a $35 billion investment into electric- and
autonomous-vehicle development, including new plants to make EV batteries.
That’s more than three times the profit it made in 2022. When you’re staring
down such monumental costs and the eventual death of internal combustion, why
spend money to develop and build hybrids that still need gas engines when you
can put all those resources into EVs instead?



Carmakers have varying levels of commitment to an all-electric future, yet
there’s somehow even less industry consensus about hybrid cars. Some hybrids
work in much the same way as the original Toyota Prius from 20 years ago,
combining a traditional gas engine with an electric motor. Others, like
Treiman’s Chrysler Pacifica, can plug in to charge just like an EV, further
limiting their gas usage. Take Ford, which recently dialed back its EV 
production goals and is focusing more on hybrids. Ford is doubling the
production of its hybrid model F-150, for example, which is proving to be more
popular than its fully electric sibling. Then there’s Stellantis, the parent
company of brands including Jeep and Ram, which builds America’s best-selling
plug-in hybrid car while also offering some EVs. The hybrid champion is still
Toyota; it recently announced that the ubiquitous Camry sedan would soon be
offered only as a hybrid as the company moves to basically hybridize its entire
lineup of cars.





But GM’s CEO, Mary Barra, has said the plan is to skip a “half step” and bypass
hybrids entirely to go straight to EVs. Volkswagen has been similarly reticent
on the hybrid front and is still debating whether to sell them again in America.
After discontinuing one hybrid recently, Subaru is set to offer just a single
other option, the upcoming Forester hybrid, but that won’t even be on sale until
2025. Mazda’s sole hybrid option is a large SUV that starts at nearly $50,000,
nearly double the price of the cheapest new Toyota Prius. Even Honda, another
pioneer in the hybrid space, is down to two hybrid models, though a third is
coming soon.



Caught in the middle are consumers who just want to save money on gas, but
perhaps have fears about going fully electric or can’t stomach the cost of EVs.
Rob Einaudi, an entrepreneur in Bellingham, Washington, told me he’d only want
to lease, rather than buy, an EV right now, given how quickly everything from
their range to what charging port they use is changing. “You don’t want to be
caught with old technology,” he said. Part of the challenge here is that
Americans have a bad habit of making choices about a car that might last a
decade-plus based on costs at the pump that definitely won’t last that long.
(The total number of hybrid models available actually dipped in the mid-2010s as
gas prices went down, and only in recent years has started to rise again.)



For automakers, getting their car lineups to match up with rapidly changing
consumer trends, gas prices, and their competition can be a nearly impossible
task. Adding to the complexity is the fact that “the stock market looks at
legacy automakers as poor investments,” Fiorani said. After all, the
electric-car revolution goes hand-in-hand with the tech-focused transformation
of the car industry. Automakers are eyeing revenue from software features,
downloads, new apps, and, eventually, self-driving vehicles. It is hard to
square any of that with investments into something as antiquated as the internal
combustion engine. Investors see the sky-high returns from Tesla, which produces
only electric cars, and want other car companies to follow suit. “The right
answer would have been a more gradual transition to EVs through hybridization,”
Fiorani said. “But looking at it from a financial perspective, those [investors]
want you to be fully electric. The two are working against each other.”





For now, more kinds of hybrids are coming soon to meet the new demand. That
includes a broader lineup of hybrid Toyota SUVs as well as more novel cars like
the 2025 Ram Ramcharger—a hybrid with a V6 engine that is more like a full EV
than any other gas-burning truck available right now. Perhaps more automakers
will hop on the hybrid bandwagon until most, if not nearly all, gas-burning
vehicles have some form of electric power. That would help cut emissions until
EV-charging networks are up to par. Or the rapidly falling cost of battery packs
could soon make EVs comparable pricewise to, or cheaper than, gas cars. By that
point, it wouldn’t make much sense for automakers to continue investing in
hybrids.



Those are the most optimistic scenarios. The current status quo—a mix of
different vehicle types for different needs—could persist and push us into a
world in which hybrids don’t do enough to mitigate our carbon problem. If car
companies give up on hybrids before EVs become affordable and easier to charge,
many consumers could simply opt for more gas vehicles—which isn’t great for the
climate. Or, if automakers lean on hybrids for too long, they run the risk of
delaying the EV transition entirely—which also isn’t great for the climate. The
electric transition may be inevitable, but it’s going to be messier, weirder,
and more protracted than many would like to admit.

--------------------------------------------------------------------------------

This story is part of the Atlantic Planet series supported by HHMI’s Science and
Educational Media Group.






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