Rise, stagnation, and resurgence of hybrid electric vehicles in the U.S. market

This article examines the rise, stagnation, and resurgence of the conventional (strong) hybrid electric vehicle (HEV) in the United States from 1999 to 2025. We investigate two research questions: (1) Why has there been a resurgence of consumer and manufacturer interest in HEVs? (2) Is this resurgence coming at the expense of battery electric vehicles (BEVs) or conventional internal combustion engine (ICE) vehicles? Drawing on case studies, policy analysis, payback-period calculations, and a statistical analysis of vehicle registration microdata from the State of New York, we find that product innovation—lower price premiums, improved performance, and no sacrifice in cargo space—is the primary driver of the HEV resurgence, which has occurred despite the absence of direct federal or state purchase incentives. The statistical analysis shows that HEV market share gains in New York have come predominantly at the expense of conventional ICE vehicles, while the estimated relationships with BEV and PHEV shares are much smaller and less consistent across samples. These findings suggest that, in markets like New York at current penetration levels, HEVs and plug-in electric vehicles are more complementary than directly substitutive in the transition to lower-carbon transportation.