Why hybrids are ‘having their moment’ as EVs and gas-powered vehicles lose market share

For much of the 2020s, automakers poured billions into fully electric vehicles while federal and state governments rolled out tax incentives aimed at accelerating EV adoption. But with federal EV tax credits gone, gas prices rising and car prices still high , many buyers are turning to hybrids instead. "Hybrids are having their moment," says Stephanie Valdez Streaty, director of insights at Cox Automotive. The most recent data from Cox shows hybrids emerging as the fastest-growing segment of the U.S. auto market, while both traditional gas-powered vehicles and EVs ceded market share in late 2025. Hybrids accounted for nearly 20% of new vehicle sales by late 2025, nearly triple their share from three years earlier. At the same time, EV market share fell sharply to 5.9%, down from a peak of 10.3% in 2025, according to Cox data. Experts say hybrids are resonating with buyers because they offer better fuel economy than gas-powered cars without many of the charging concerns or lifestyle changes that can come with fully electric vehicles. What hybrids offer that EVs don't Hybrid vehicles typically cost more than comparable gas-powered cars, but substantially less than many fully electric vehicles, according to Kelley Blue Book . At the same time, hybrids typically achieve 25% to 40% better fuel economy than comparable gas-powered models, according to JD Power . …