Americans Are Getting Swooned By Plug-In Hybrids. "I Don't Want A Hybrid," They Say – Until They Hear It's $70 A Month Cheaper Than Gas

Fully electric vehicles (EVs) have grabbed much of the spotlight in the race toward greener driving. Still, plug-in hybrid electric vehicles (PHEVs) are quietly gaining fans across the U.S. While EVs promise an emissions-free future, many drivers still worry about range anxiety and the lack of charging infrastructure. 

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Enter PHEVs – offering the best of both worlds with an electric motor for short trips and a gas engine for longer ones. And as dealers know all too well, nothing grabs a buyer's attention quite like the words, "It's $70 a month cheaper than gas." By 2029, about 360,000 plug-in hybrids are expected to be sold each year.

Plug-In Hybrids Are The Rising Stars

After years of sitting on the sidelines, PHEVs are enjoying a resurgence. In the U.S., they're becoming more popular as a middle-ground option between traditional gas-powered and fully electric vehicles. In 2024 alone, the PHEV market in the U.S. is projected to hit $18.8 billion in revenue, with sales expected to grow steadily over the next few years. 

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What's driving this growth? Consumers are increasingly looking for sustainable options and government incentives – such as federal tax credits – make PHEVs attractive. 

Some buyers, like Bria Adams, a 28-year-old firefighter from Massachusetts, were initially skeptical of hybrids but changed their minds when they saw how much they could save. "I never thought I'd drive a hybrid," Adams told The Wall Street Journal. "But when I found out my Jeep Wrangler plug-in hybrid was $200 cheaper to lease than the gas version, I was sold."

Why Hybrids Are Winning Over Americans

The allure of plug-in hybrids goes beyond cost savings. These vehicles let drivers go electric for short trips, often around 20-40 miles, before switching to a gas engine for longer distances. For daily commutes and errands, one rarely needs to stop at the gas station, cutting fuel costs significantly. And because the car can run on gas when needed, range anxiety – one of the biggest concerns with fully electric vehicles – is a nonissue.

The sales figures show that plug-in hybrids are becoming more popular. In the second quarter of 2024, they made up 2% of all light-duty vehicle sales in the U.S., a small but important increase from the previous year. Overall, hybrid sales jumped by over 30% as more buyers realized they could enjoy the benefits of gas and electric power.

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In China, PHEVs are now competitively priced, often cheaper than gas and electric vehicles. It’s a different story in the U.S., though. They're still among the most expensive options, averaging $65,300 in 2024. 

However, thanks to government incentives and aggressive discounts from manufacturers, PHEVs can sometimes be cheaper to lease or buy than their gas-powered counterparts. The Jeep Wrangler 4xe, for example, comes with hefty manufacturer discounts of up to $12,000, plus a $7,500 federal tax credit for leased models.

These savings turn many skeptical shoppers into hybrid converts. As one dealer put it, many people come in and say, "I don't want a hybrid." But they’re suddenly interested when they find out it's cheaper than gas.

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