Many American car buyers are turning to hybrid vehicles as a response to the recent increase in gas prices due to the conflict in Iran, according to the latest industry sales data and dealers. In the two months following the start of the Middle East conflict in late February, U.S. hybrid sales surged by 37%, outpacing the overall car market growth of 15% during the same period.
Despite gasoline prices in the U.S. surpassing $4 and reaching a four-year high in late April, the interest in fully electric cars has not seen a similar spike, as highlighted by data from the American Automobile Association. Electric vehicle sales in the U.S. only grew by 11% in the two months since the conflict began, remaining below the general sales trend and significantly lower compared to the previous year when a $7,500 federal tax credit expired.
In contrast to the U.S., European markets have witnessed a significant rise in electric vehicle sales amidst higher fuel costs. The UK experienced a 79% surge in EV sales after the Iran conflict began, while Germany saw a 39% increase in fully electric car sales, outpacing the overall industry growth.
Hybrids have emerged as a more popular choice for U.S. consumers seeking eco-friendly vehicles for several reasons. Analysts and dealers attribute this preference to the lower cost of hybrids compared to EVs, the wider range of available models, and the convenience of not needing to adapt to new technologies like nightly vehicle charging.
Data from online marketplace CarGurus indicates a growing interest in both hybrids and EVs among consumers. Hybrid vehicle searches accounted for 14% of all searches on the platform in April, up from 12% in the previous month, while EV searches increased from 3.4% to 5%. Car dealers like Brad Sowers have observed a rise in hybrid sales, with hybrids representing 35% of overall sales in April at his Kia dealership.
Toyota, a pioneer in hybrid technology with its Prius model, has seen a boost in sales with its hybrid-only offerings for popular models like the RAV4 SUV and Camry sedan. In the U.S., Toyota’s electrified sales grew by 34% in the two months since the Middle East conflict began, mainly driven by the hybrid business.
Despite the surge in gas prices, some car shoppers remain undeterred, with purchases of large pickup trucks increasing by 20% in March and April compared to before the conflict. Dealers like Todd Szott note that customers are influenced more by manufacturer deals than fuel prices, with many opting for gas-powered vehicles due to substantial discounts being offered.
Truck sales continue to dominate the market, showcasing that consumer behavior is not solely dictated by rising gas prices.
