Some auto retailers worry GM is missing an opportunity to nab buyers who aren’t ready for EVs
Some influential dealers are pressing General Motors to introduce hybrid models, worried they risk losing customers who aren’t ready to make the switch to fully electric cars.
Dealers who serve on advisory committees to the automaker have urged executives in several recent meetings to add hybrids to GM’s lineup, according to people involved in the discussions. GM has focused on fully electric cars in recent years and largely bypassed hybrids, which pair an internal combustion engine with a small battery and electric motor to boost fuel efficiency.
The dealers said they expressed concern that more customers are looking for a middle ground between conventional gas-engine cars and EVs, which are more expensive and require regular charging.
GM executives have acknowledged the dealers’ views but haven’t made any commitments to future hybrid options, the people said. Automakers often solicit input from dealers on vehicle planning but still typically keep the details of future models under wraps.
A GM spokesman declined to comment.
The dealers’ pleas for the company to consider adding hybrid models show another dimension of the pressure facing GM Chief Executive Mary Barra as aspects of her EV push stall.
Making such a move would mark a major strategic reversal for GM, which unlike many of its rivals, went all-in on EVs and largely sat out the hybrid market, which executives viewed as an unnecessary interim step.
Last month, Barra didn’t rule out the prospect of introducing hybrid models in the U.S. when asked about it during an event in Detroit, noting that GM sells them in China.
“I still believe in the endgame, that you want to move to EVs as quickly as you can,” she said. “But we have the technology, and we’ll continue to look at where the market is.”
Across the industry, automakers have seen the pace of EV sales growth slow after a few years of intense consumer interest.
Meanwhile, hybrids have taken off over the past year amid consumer reticence toward full electrics, turned off by higher prices and worries about getting stranded between charging stations. Many dealers and car executives see hybrids as an important choice on the spectrum between straight gas-powered cars and EVs.
“With EV adoption slower, hybrids are going to be a bigger part” of the business, Ford Chief Financial Officer John Lawler said at a Barclays investor conference in November.
Toyota, Honda, Hyundai and Kia are the major players in the hybrid market. Sales of hybrid vehicles in the U.S. surged more than 50% last year, after a small drop in 2022, according to research firm Motor Intelligence.
Those include regular hybrids, which supplement the gas engine but generally don’t propel the car on electric power alone, and plug-in hybrids, which can travel in electric mode for a certain distance—typically 10 to 40 miles—before the gas engine takes over.
“Hybrids are what’s hot right now,” said Chris Hemmersmeier, a Salt Lake City-area car dealer who has GM stores as well as other brands, including Kia and Jeep.
He said hybrid models at those non-GM stores—including the Kia Sportage compact SUV and Stellantis’s Jeep Wrangler and Grand Cherokee plug-in-hybrid SUVs, sold under the 4xe name—have been selling briskly, and he’s worried GM’s EV-heavy focus will cause his stores to lose customers.
“I’d like to see GM prioritize hybrids,” said Hemmersmeier, who operates Chevrolet and Buick-GMC stores and hasn’t been involved in the dealer-committee meetings with company executives.
GM offered hybrids for the U.S. market at times over the past two decades. In the mid-2000s, it came out with hybrid versions of its big SUVs, such as the GMC Yukon and Cadillac Escalade, among its most profitable vehicles. Those sold poorly, though, and were phased out within a few years.
GM was among the first automakers to introduce a plug-in hybrid when it released the Chevrolet Volt in 2010. It offered about 40 miles of driving range in electric mode before a gas generator kicked on to power the electric motor. The Volt was celebrated as an engineering feat and garnered a loyal following, but was a money loser and fell short of GM’s internal sales targets. The company discontinued it in 2019.
Today there are dozens of plug-in hybrid models on sale in the U.S., with Stellantis’s SUVs the top sellers.
In recent years, GM executives have expressed skepticism about hybrid technology and concern that they would distract from the company’s long-term goal of near-exclusive electric sales by 2035.
“Customers generally aren’t interested in hybrids, the value proposition there,” Barra said at a Barclays investor conference in 2019. “We believe moving to electric vehicles as quickly as possible is the right thing to do.”
In recent months, dealers more broadly have expressed worries that U.S. policy to expand EV adoption is getting ahead of consumers.
Last week, auto retailers representing about 5,000 U.S. stores sent a letter to President Biden, urging his administration to stand down from proposed new tailpipe-emissions rules that would require more than half of U.S. sales to be EVs by next decade. They said a lack of charger availability and consumer interest make that unrealistic.
“Wait for the American consumer to make the choice to buy an electric vehicle, confident that they are affordable and won’t strand them because of a lack of charging stations,” the letter said.
