Increased Plug-In Hybrid Demand Drives Prices Sky-High

As the demand for pure electric vehicles seems to be cooling, plug-in hybrids are shooting up in popularity and price.

phevs expensive

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Andrei Nedelea

By: Andrei Nedelea

Sep 6, 2024 at 4:00pm ET

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The average plug-in hybrid in the U.S. sold for just under $63,000 in July
That's $4,400 more than the average electric vehicle
The benefits of PHEVs are driving prices up

Car buyers are increasingly seeing the benefits of plug-in hybrids, which offer plenty of electric range but also have a combustion engine to keep the dreaded range anxiety at bay, and PHEVs are now more in demand than ever. This increased appetite for PHEVs has made them more expensive on average compared to EVs, according to a new report.

Business Insider says the average plug-in hybrid in the U.S. sold for just under $63,000 in July, about $4,400 more than the average electric vehicle. This marks a significant change since the spring of 2022, when an EV was, on average, around $4,000 more expensive than a PHEV.

Data from the U.S. Energy Information Administration reveals that in the first quarter of 2024, plug-in hybrids' share of the light-duty vehicle market grew from 1.7% to 2% year-over-year. Hybrids saw an even bigger resurgence in 2024, with sales up by over 30% compared to 2023. They had a market share of 8.6% in Q1, which grew to 9.6% in Q2.

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Plug-In Cars Lost Market Share In Europe In June 2024

For fully electric vehicles, the market share of 7.1% remained almost unchanged in 2024. Their average price went down from $57,405 in January to $56,371, which was 21.1% higher than the average for the entire light-duty vehicle segment.

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In light of this apparent EV sales slowdown, manufacturers have reiterated their plans to go fully electric, promising to pivot to making more hybrids and plug-in hybrids. Toyota, Ford, Volkswagen, General Motors and even Aston Martin are some of the automakers that have announced they are either postponing the launch of some EVs, scaling back production of the ones they’re already making, or planning to shift to building more hybrid vehicles.

Even Volvo, which was one of the most vehement proponents of going fully electric by the decade’s end, with a previously announced goal to only sell EVs after 2030, has put that plan on hold (although it still has several cool EVs coming, including a large electric sedan). This is so even despite Volvo’s sales record showing that it’s already doing better than others, with about 26% of all the vehicles it sold in the second quarter being BEVs. Together with PHEVs, the share rose to 48%, surpassing its premium competitors.

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