millennium, the hybrid car was considered a

revolutionary step toward a less polluted future.

It wasn't exactly exotic or luxe, but Hollywood

celebrities loved its green image, while

ordinary, cash strapped consumers adored its

exceptional fuel economy.

At a time when gasoline prices were on their way

to record highs.

But since then, EVs have stolen the spotlight for

all electric with electric.

Vehicles, the.

Tesla model Y becoming the best selling vehicle in

California.

While EVs stole the show, the company, once lauded

for bringing hybrids to the mainstream, received

extensive criticism from environmental groups for

being slow to adopt EVs and for lobbying against

tougher climate legislation. But EV sales

have slowed in the US, going from selling in just

25 days at the beginning of 2023 to 72 days just

over a year later.

Meanwhile, hybrids are flying off lots faster

than even plain internal combustion cars and

winning awards.

Hybrid sales grew five times faster than EVs in

February 2024.

Automakers are finally reading the room.

They're realizing that they still have to sell

cars right now, not in the future.

And that's this is what people want to buy.

Automakers, including some that had made bold

commitments to go all electric, are now pulling

back on EV manufacturing in favor of them.

But hybrids aren't as effective as EVs at

reducing greenhouse gases.

Defenders say they are a solid, short term

solution. Automakers, including some that had

made bold commitments to go all electric, are now

pulling back on EV manufacturing in favor of

hybrids.

Ev sales in the US had a banner year.

In 2023, a record 1.2 million units were sold.

Their market share is growing, and yet the oft

reported slowdown is real.

Data shows sales growth is leveling off.

One of the reasons legacy manufacturers are seeing

an EV sales slowdown has been Tesla's aggressive

price cuts throughout 2023, but legacy

automakers are still selling lots of hybrids,

especially standard ones without a plug.

You get a hybrid off of the truck at a dealership.

A lot of times that vehicle is already already

has a customer, so it's not even a point of if it

actually having to sell.

Comparing January 2023 and February 2024 data show

that hybrids continue to sell much better than both

internal combustion vehicles and EVs.

Look no further than the company that brought the

hybrid to the mainstream more than two decades ago.

Toyota Pro EV and environmental groups say

the world's largest automaker has been

lobbying to slow the EV revolution it missed out

on, though it has experimented with battery

electric vehicles before.

The company has long argued that the bridge to

full electrification will be a long one, and that

most consumers aren't ready for fully electric

vehicles. That said, it did in 2021 unveil plans

to release 30 EV models by 2030, with an annual

sales target of 3.5 million.

In January 2023, Toyota faced its first

shareholder proposal in two decades.

Investors insisted the company do more to combat

climate change and challenged the

reappointment of chairman and CEO Akio Toyoda.

The proposal was defeated and Toyota kept his board

seat, but he did step down from his role as CEO

as of early 2024.

Toyota has only two EVs, and neither sell in large

volumes, but in 2023, sales of its hybrids and

plug ins increased nearly 28% over the previous

year. They make up about 30% of the Japanese

Behemoth's portfolio.

Nothing has really changed within the Toyota

framework of product planning, and explain why

we have continued to say this very, very

succinctly. A year ago we were being mocked for it.

Today we were being congratulated for it.

We're not swayed by either one.

Toyota's American rival and sometimes partner

Ford, has been selling EVs for longer and in

larger volumes.

Sales of its acclaimed Mustang Mach E and the

F-150 lightning climbed nearly 18% in 2023

compared to the previous year.

Hybrids still outpaced that jumping by more than

a quarter. Ford CEO Jim Farley said the automaker

would postpone about $12 billion in planned EV

investment and pull back on production of the

electric F-150 pickup in favor of a hybrid version.

Success is a part of why everyone else maybe wants

to jump back in, because they're seeing these

brands have success with these vehicles seeing so

much demand. And not only are they selling fast,

they're selling at MSRP in many cases.

While Toyota may have pioneered the mainstream

hybrid, General Motors brought the plug in hybrid

to America in the form of the now discontinued

Chevrolet Volt.

From an EV perspective, we also see this is our year

to really execute and see growth there.

So it's it's a strong performance in 23.

I'm really proud of the team.

But in early 2024, the company said it will

reintroduce plug in hybrids to its North

American lineup.

If you look at their core buyer base, a lot of these

people infrastructure is not built out in places

where they are living.

If they have folks that are coming back to

dealerships with their old General Motors brand

vehicles, it's going to be a much easier sell to

get these people into hybrids than it is to get

them into EVs.

Automakers are under great pressure to meet

continually tightening federal fuel economy

standards. A single company's fleet has to hit

an average target of 58 miles per gallon by 2032.

That is 18% higher than the current rule of 49

miles by 2026.

The EPA also issued standards in March 2024

that call for 35 to 56% of cars to be full EVs by

2032, with US household costs rising across the

board and gasoline prices at three and a half

dollars per gallon on average.

Hybrid vehicles offer a sweet spot for many.

Ice. Vehicles are losing market share, but EV sales

are flattening. The market is running out of

early adopters, and many say these vehicles aren't

ready for the mainstream.

Basically, in the last ten years, we've gone from

0% of the industry to 8%.

So we're about a ten year period of time.

The government's regulations to say, okay,

we've gone from 0 to 8% in ten years, but now in

the next eight years, we're going to grow by

60%, not grow by 60%.

We're going to take that number from 8% to 67%.

People are saying, wait, I don't know who's all

going to buy those right now.

As we move towards mass market, those folks are a

lot harder to sell to. They're a lot more price

conscious, a lot more product conscious.

They have a lot more questions in general.

Um, and I think that's going to really plague the

EV adoption rate for, for quite some time.

And that was always going to be the case.

On average, EVs were the most expensive powertrain

you could buy in early 2024.

Plug in hybrids were almost as pricey.

Standard hybrids were cheaper than everything,

including Ice vehicles.

I think right now in this country we are in an

affordability crisis amongst many industries.

But I think auto is being a big one because if we

look at how people have afforded vehicles in the

past, it's been because of low interest rates.

And now that is not the case.

The average interest rate on a new vehicle loan is

over 7% used.

It's over 11%.

So when we look at what we can afford, it probably

is less than what we afforded in the past.

It's a tough pill to swallow to say I can buy a

Ice vehicle.

Or even a hybrid vehicle at, let's say, $700 a

month and a Bev at 9 or 1000.

That's that's a significant bump.

Evs have strong selling points.

They are simpler and cheaper to maintain, and

the cost of charging is a lot less than refueling in

parts of the country where gas prices are

higher. But there are stubborn obstacles, still

relatively long charging times, and a lack of

public charging infrastructure.

But a lot of folks say, I just don't want the hassle

of owning an EV. Like my life is already

complicated enough. I don't need to go learn a

whole new system of doing things to just drive and

go places that I want to go.

It's easy to put on a piece of paper.

Hey, I spent X amount of gas, I'm going to spend X

amount of electricity. Great. I'm going to be

ahead of the game in 18 months in terms of cost,

but a convenience factor is priceless.

It's an idea that I might run my family four states

away for a vacation once a year.

I don't want to take three days to get there.

That convenience factor might completely take that

consumer 100% out of the Bev market, and it can't

be quantified.

83% of EV charging occurs at home, but J.D.

power data shows that 1 in 3 car shoppers don't

have a home charger, nor the ability to install

one. The firm runs a mix of studies on electric

vehicles, including a year round public charging

survey of 30,000 consumers in all 50 states

and D.C.. The most common reason people decide not

to buy an EV is the lack of public charging.

Ev owners say public charging issues are the

least satisfying aspect of the ownership

experience. Nearly 20% of the time, drivers visit a

public charger, they aren't able to charge.

Most of the time, that is because chargers are

failing or malfunctioning, but the

number of times a station is unavailable or the wait

is too long has doubled from 10% to 20% of

failures in just two years.

While EV adoption has hit some speed bumps, no one

expects demand to fall or even remain flat forever.

Globally, EV production is expected to double from

13,000,000 in 20 24 to 30 5,000,000 in 2031, while

hybrids are only expected to climb from 13 to 15

million in the US, EVs will see staggering growth

in the coming decade.

We're still very bullish on electric vehicles and

where the market is going to go.

You look at the investments that have been

made in vehicle electrification by the

manufacturers. I think that speaks loudly in

terms of where the manufacturers think the

market is going to go, an important distinction.

Standard hybrids are really just more efficient

gas cars, supplemented with a battery and

electric motor that extends the vehicle's fuel

economy. This is what the original Prius was and

what many hybrids are today.

Plug in hybrids have a charging port, battery and

at least one electric motor. Some of them can,

in theory, be run without gasoline at all.

Like an EV, the engine acts as a range extender,

in others the engine and electric.

Motor work.

Together.

With a plug in hybrid or a hybrid, you know, you get

to largely avoid that public charging scenario.

You're eliminating what is the worst aspect of

owning an electric vehicle?

There has been a slight increase in the number of

models available compared with standard hybrids

since 2019.

Still, though, they are the smallest category of