EVs Are Too Expensive. Here's What Americans Are Buying Instead

A car is one of the largest expenses many Americans have. And over the past few years, the price of a new vehicle has rapidly risen along with car repair costs, insurance, and nearly everything else.

There are many reasons for price increases, including manufacturing disruptions during the pandemic, a lack of available workers, supply chain shortages, rising demand, and inflation.

And while many Americans are open to buying an EV -- 55% according to Gallup -- many people opt to buy a hybrid vehicle instead. While car buyers want more energy-efficient vehicles, they also want them to be less expensive than EVs.

Why people are choosing hybrids over EVs

The latest data from Edmunds shows that Americans bought more than 1.2 million hybrids in 2023, an increase of 76% from the year before.

Hybrids are having their day in the sun thanks to their combination of energy efficiency and practicality.

First, they're cheaper than many electric vehicles on the market, considering the average price of an EV in 2023 was $59,400 compared to $42,381 for a hybrid, according to Edmunds.

They're also much more practical for many car buyers because they don't rely solely on electricity. Public chargers aren't ubiquitous in the U.S. yet, and even if you have access to fast-charging stations -- which are even less common -- getting a battery to 80% can still take between 20 minutes to an hour, that's far longer than filling a hybrid with gas.

Finally, there's no range anxiety with a hybrid vehicle. When you run out of battery power or reach a certain speed, the gas-powered engine kicks in. That alone is enough reason for many car buyers to choose a hybrid over an electric vehicle.

One way buyers won't save money with a hybrid

While many car buyers could save money by opting for a hybrid over an all-electric vehicle, one expense will likely be costly no matter which they choose: car insurance.

Because hybrid vehicles have many of the same components as electric vehicles, like electric motors and batteries, the cost to repair them may be more than gas-powered vehicles. Progressive says costly battery packs and the lack of technicians who know how to work on the electric vehicle systems can make EV and hybrid insurance costs higher.

And in some cases, hybrid auto insurance may actually cost more than EV insurance. Consumer Reports found that insuring the Toyota Prius, a hybrid vehicle, costs $1,905 annually, $35 more than insurance for the all-electric Nissan Leaf.

That makes it all the more important for hybrid and EV owners to compare car insurance companies and shop around for plans.

How to save up to $7,500 on a new hybrid

The good news for potential hybrid car buyers is that the U.S. government has made it easier to get a $7,500 tax credit -- or $3,750, depending on the model -- for certain electric and hybrid vehicles this year.

Last year, buyers had to claim the credit when they filed their taxes (which was more complicated), but this year, the credit can be applied immediately at the dealership when buying a qualifying vehicle. You can see which vehicles receive the tax credit on the U.S. Energy Department website.

With many EVs out of range (pun intended!) for many people's personal finances, a hybrid vehicle may be the right balance between energy efficiency and cost. And with the latest government incentives, now could be a great time to find one.