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Forget EVs, These Are the Real Winners In The U.S. Auto Market

America sold more hybrid cars compared to electric vehicles in 2021 even as car companies supercharge their future plans geared towards EVs.

Hybrid car sales trumped its electric counterparts in 2021 even as legacy auto makers intensified their push towards battery-powered vehicles.

U.S. sales of hybrid vehicles fired up to 801,550 vehicles last year, outnumbering the 434,879 electric vehicles sold in 2021, according to a Reuters report that cited data from research firm Wards Intelligence.

Hybrid car sales rose 76% in 2021 which adds up to about 5% of the overall U.S light vehicle sales auto compared to an 83% jump in EV sales, albeit on a smaller base number. The EV represented 3% of the market.

To be sure, hybrid car models combine a conventional combustion engine with an electric battery.

Leading the pack was Japanese automaker Toyota Motors  (TM) - Get Toyota Motor Corp. Report, which has reportedly earmarked about $35 billion, in capital spending for its Prius-style hybrids, plug-in hybrid vehicles and fuel-cell EVs. 

The company, which overtake GM as the top-selling U.S automaker in 2021, posted a 73% rise in sales to 583,697, with most of them coming from its hybrid models, the Reuters report added. GM sold fewer than 25,000 electric vehicles.

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"Hybrids offer a really intriguing mix of fuel economy performance without some of the huge drawbacks that electric vehicles present," Brett Smith, technology director at Center for Automotive Research, told Reuters.

In September, Toyota Motors said it will invest $13.6 billion in batteries used for electric and hybrid vehicles by 2030.

Toyota is also investing "heavily in hybrid powertrains, including the technology it pioneered in the 1990s with the Prius," The Wall Street Journal report added.

Separately, Honda Motors  (HMC) - Get Honda Motor Co. Ltd. Report sold a record 107,060 hybrid cars last year, a 67% jump compared with 2020.

News of EVs dominated the Consumer Electronics Show in Las Vegas last week, a sign that the excitement around EVs continues to build, even if the shift in sales is still barely noticeable.

Car companies like General Motors  (GM) - Get General Motors Company Report, Ford  (F) - Get Ford Motor Company Report and Stellantis  (STLA) - Get Stellantis N.V. Report are pouring money into the development of electric vehicles and battery factories.

The three companies have also committed to increase sales of battery electric, fuel cell, and plug-in hybrid vehicles in the U.S. to 40-50% of annual volume by 2030, according to an August report by a local Detroit media outlet DBusiness Magazine.

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