Hybrid vehicles are gaining popularity in the United States, even as electric vehicle (EV) sales have started to level off. In the first quarter of 2025, about 22% of all light-duty vehicles sold were either hybrid, battery electric or plug-in hybrid models. This marks an increase from 18% during the same period in 2024. However, while hybrid vehicles continue to grow in market share, battery electric, and plug-in hybrid vehicles have seen their sales remain mostly flat, according to estimates from Wards Intelligence.
Each type of vehicle affects the energy sector differently. Battery electric vehicles and plug-in hybrids require electricity, which often comes from the power grid, making their use directly tied to electricity demand. In contrast, hybrid vehicles do not require external charging because they don’t have plugs, so they do not add to grid power demand.
The recent slowdown in electric vehicle sales has been linked to falling sales of some popular battery electric models, including the Honda Prologue, Chevrolet Equinox, and Tesla Model Y. These losses have been partially balanced by higher sales of other electric vehicles like the Volkswagen ID.4 and the Toyota bZ4X.
Electric vehicles continue to be more common in the luxury vehicle segment. However, the overall share of luxury vehicles in the light-duty vehicle market dropped to 14% in the first quarter of 2025, the lowest level since mid-2020. Within the luxury segment, electric vehicles made up 23% of sales. In comparison, EVs accounted for over one-third of luxury vehicle sales during 2023 and 2024. The shift is partly due to a change in how vehicles are classified—Wards reclassified the Tesla Model 3 from luxury to non-luxury in late 2024.
One ongoing challenge for EV adoption is its higher cost. The average price for a battery electric vehicle rose from $55,500 in December 2024 to $59,200 in March 2025. This is significantly more than the average price for all new vehicles, which fell from $49,700 to $47,500 in the same period. The 25% price gap in March 2025 was the largest since April 2023.
Even though electric vehicles are making up a growing share of new car sales, they still represent a small portion of the total vehicles on U.S. roads. According to data from S&P Global, included in the Monthly Energy Review, EVs made up less than 2% of the entire registered light-duty vehicle fleet in 2023, the most recent year for which complete data is available. This shows that while interest in EVs is rising, they still have a long way to go before becoming a major part of the overall vehicle landscape.
