Gas prices are causing many drivers to consider hybrid and electric vehicle ownership because refueling costs have spiked. Hybrid sales have picked up year-over-year, but EV sales are slumping according to sales data from automotive news site Motor1.com.
Here's why hybrid sales are through the roof and EV sales are on the decline.
Why EV sales are down in 2026 despite high gas prices
Internal combustion engine vehicles may be less efficient than battery electric vehicles but the former still outsell EVs by a large margin. Though there are a few attractive electric car and SUV options on the market, there are several reasons why electric vehicle registrations dropped 31% in July.
One of the main reasons fewer drivers are purchasing electric vehicles in 2026 is the absence of the federal electric vehicle tax
incentive. This incentive allowed eligible drivers to claim a tax credit of up to $7,500, reducing the total cost of their EV purchases.
An uptick in 2025 electric vehicle sales is largely due to drivers taking advantage of the tax credit while it was still available. The tax credit was officially eliminated on Sept. 30.
Without the tax incentive, most EVs are more expensive than their gas and hybrid counterparts, which makes them unattractive options for budget-focused consumers. Additionally, many drivers find electric vehicle charging to be inconvenient compared to gas and hybrid vehicle refueling.
Why hybrid car sales are climbing in 2026
Hybrid vehicle sales are climbing in 2026 because many hybrid models like the Toyota Camry and Honda Civic Hybrid are affordable and efficient. Vehicles with hybrid powertrains can achieve exceptional fuel economy, which is helpful as gas prices rise to historic heights.
"Toyota and other hybrid-focused rivals keep adding inventory that many dealers say they could sell twice over" according to Motor1.com. Hybrid vehicle sales are on the rise in 2026 because many hybrids come with more standard features than their traditional relatives. Additionally, hybrid powertrains also add horsepower to many nameplates, making the hybrid iterations more enjoyable to drive.
Automakers like Toyota produce several standard hybrid nameplates (Camry, Sequoia, Sienna, RAV4) since they can sell just as well as gas models and can offer even more value to consumers as daily drivers.
The best hybrid car segment for budget-oriented drivers
If you're looking for an affordable hybrid car, hybrid compact cars like the Corolla Hybrid and Elantra Hybrid are the best options. The 2026 Toyota Corolla Hybrid starts at $24,975 and achieves 50 miles per gallon combined.
Hyundai's Elantra Hybrid starts at just $25,650 and earns 54 miles per gallon combined. If you're in the market for an affordable new hybrid that achieves stellar gas mileage, there are plenty of great compact hybrid sedan options with starting prices under $30,000.
They may be slightly more expensive than their combustion engine counterparts, but hybrid cars can save drivers thousands of dollars in refueling costs over the course of ownership.
Charles Singh is an Autos Connect Reporter for The Tennessean, part of the USA TODAY Network. Contact him at CSingh@Gannett.com.
This article originally appeared on USA TODAY: Why EV sales are plummeting as hybrids gain popularity
