Hybrid EV Sales Continue to Rise, While Battery EVs Falter

Hybrid vehicles are becoming a more popular option among U.S. car buyers, a new report finds.

The analysis by the U.S. Energy Information Agency found that hybrid electric vehicles are continuing to gain market share, even as the sale of battery electric vehicles has slowed due to the elimination of tax credits for their purchase as of September 2025 as part of the One Bill Beautiful Bill.

The EIA found that about 22% of vehicles sold in 2025 in the U.S. were electric or hybrid electric, an increase from 20% the previous ear. Battery EV car sales increased significantly in the second half of 2025 as buyers rushed to take advantage of the tax credits, then dropped after they expired. For the first time, the annual sales and market share of battery EVs fell.

At the same time, the sales of hybrid electric vehicles continued to gain. Most of the increase is from hybrids powered by internal combustion engine and one or more electric motors, which uses energy stored in batteries. The battery is charged through a regenerative braking system and by the internal combustion engine, and is not plugged in to charge. In contrast, plug-in hybrids also have engines and battery power that must be recharged through a plug-in charger.

Hybrid EVs were not eligible for tax credits when they were in force, yet have continued to draw consumer interest because they emit less pollution, offer better gas mileage, are quieter, and eliminate “range anxiety” that prevents some consumers from purchasing battery EVs that must be charged at certain intervals.

The EIA found that hybrid vehicles made up about 14% of 22% of the total EV sales, while battery EVs fell to less than 6% and plug-in hybrids dropped to less than 2%.

An S&P Global report found that West Coast markets led the nation in new hybrid registrations in 2025, followed by Seattle, and Washington, D.C. The lowest share of hybrid registrations are in Texas, Florida, and the Midwest.