- The transition to EVs is taking longer than many automakers expected, so they’re doubling down on hybrids.
- Carmakers plan to launch 58 hybrids in the U.S. in the next few years, according to Bank of America analysts.
- Hybrids will make up a greater share of new car launches going forward, while EVs’ share will fall, the analysts said.
Being a product planner for an auto company sounds like a car nut’s dream job. But in 2025, deciding which models to launch when is more fraught than ever.
Tariffs are slamming auto companies from all directions. Flip-flopping priorities at the federal level will likely spell the end of electric vehicle incentives and relax efficiency rules. Demand growth for electric cars has slowed down. All of that is throwing automakers for a loop, according to the latest edition of Bank of America’s annual “Car Wars” report, released last week.
“The unprecedented EV head-fake has wreaked havoc on product plans,” the bank’s auto analysts wrote in the report, which examines manufacturers’ planned U.S. vehicle launches from model years 2026 through 2029. “The next four+ years will be the most uncertain and volatile time in product strategy ever.”
Notably, during this rougher patch for EV growth Americans will see a whole lot of new hybrids hit the market.
After pushing hard on fully electric cars for years, automakers are slowing their roll and canceling or delaying some plans. At the same time, they’re placing new emphasis on the partially electrified vehicles that consumers are increasingly craving.
During the 2026-2029 model years, automakers plan to launch 58 hybrids, 71 EVs and 81 combustion vehicles in the U.S., according to Bank of America’s analysis. So, more electric rides than hybrids. But it’s the trend lines that are particularly noteworthy here.
Hybrids will make up a larger percentage of all new vehicle launches going forward than they did before: 28% during the period studied, up from 20% in 2024 and 17% in 2023. Meanwhile, EVs’ share will drop to 34% of new vehicle launches from 40% last year and 44% in 2023.
Photo by: Kevin Williams/InsideEVs
“Hybrids appear to be gaining more relevancy as many consumers seek more efficient vehicles but are disinterested in EVs,” the analysts wrote.
Consumer sentiment is certainly part of it. With most early adopters already satisfied, selling EVs to the masses is proving harder than the industry anticipated. Hybrids, which are generally cheaper and don’t require charging, are more popular than ever. And car companies are taking note.
Upcoming policy changes are also no doubt impacting automakers’ plans. In a future with looser environmental regulations and without pro-EV incentives, manufacturers won’t need to invest as much in the electric cars that are still a drag on most of their bottom lines. While hybrids can be an important tool for cutting one’s gas bill and carbon footprint, critics point out that they aren’t nearly as clean as EVs.
The 2025 Honda Civic Hybrid.
Photo by: Mack Hogan/InsideEVs
So which brands are pushing the hardest into hybrids? Bank of America expects General Motors to launch nine of them, including electrified variants of the Cadillac Escalade, GMC Yukon and Chevrolet Tahoe for 2029. After initially planning to largely skip over hybrids and transition straight to an EV lineup, GM now says it will introduce some hybrid models. It hasn’t released specifics.
The analysts expect nine from Stellantis, eight from the Hyundai Motor Group and eight from Toyota, the leader in hybrids. Some that have a weaker hybrid pipeline are Nissan and Mercedes-Benz. So far, Bank of America expects one hybrid from each.
This push will translate to an estimated 3.4 million hybrid car sales in the U.S. in 2028, or a 20% market share. The analysts think there’s even more room to grow, and that’s positive news for the future of cleaner cars in America.
“It should be noted that these implied hybrid penetration rates appear to undershoot the relative hype that has been building in response to the stall in EV sales,” they wrote. “Simply, automakers need to launch more hybrid vehicles in the U.S. market, in our view.”
Contact the author: Tim.Levin@InsideEVs.com
