GM is late to hybrids. Experts say there's still time to cash in
Published in Automotive News
General Motors Co.'s new mainstream hybrid offerings are on the way just as momentum around the mixed gas-and-electric models is moving into a higher gear, analysts said.
But the Detroit automaker needs to catch up after years ago abandoning hybrids — and popular smaller vehicles — for profit-rich trucks and EVs — a weak spot CEO Mary Barra acknowledges as she seeks to redefine GM as a tech-first company.
"We will have hybrids in our portfolio in multiple segments: the key segments that we participate in," Barra told investors after announcing strong profits in recent months. "If you look at right now, a lot of where the hybrid activity is is in compact cars, midsize cars and minivans, which are three segments we're not a part of right now."
That's why GM is racing to catch its rivals: Hybrids made up about 16% of total vehicle sales in the first half of the year — up roughly 23% from the same period last year, according to Cox Automotive. Continued high gas prices are pushing drivers to hybrids, analysts say, which offer better fuel economy even in midsize and large SUVs.
"The customers are going after those hybrids for sure," said Rhett Ricart, head of Ricart Ford in Columbus, Ohio, and former chairperson of the National Automobile Dealers Association lobbying group.
Barra and other GM leaders have declined to provide additional details on future hybrid models and launch timing. But Sam Fiorani, a top auto industry consultant, said he expects GM to roll out hybrid versions of its Chevrolet Equinox compact crossover in 2028, full-size pickup trucks in 2029 and midsize SUVs in 2030.
"They're not going to tell you," the AutoForecast Solutions vice president said. "This is our forecast on it, based on information we have through the industry."
To support the hybrid push, GM announced plans this week to build hybrids at its Lansing Delta Township Assembly plant near Michigan's capital. Workers at the plant now make the GMC Acadia, Buick Enclave and Chevrolet Traverse — all midsize SUVs. GM will invest $750 million into the factory to facilitate hybrid production.
GM's models are anticipated to come years after Asian rivals established dominance in the U.S. hybrid market with models including the iconic Toyota Prius and top-selling RAV4.
Toyota Motor Corp., Hyundai Motor Co., Honda Motor Co. and others are benefiting from going hybrid early, as sales of gas-and-electric vehicles have set records this year amid gas prices that have shot above $4 a gallon. GM is on the sidelines of that growing market at the moment.
"They have missed a very important opportunity," said Sam Abuelsamid, Telemetry vice president of market research. "Not having any mainstream hybrids in their entire lineup in North America is a huge missed opportunity for GM."
Toyota and other Asian brands represent more than 80% of total U.S. hybrid sales, according to Cox Automotive. "GM and Ford are the only ones without hybrid small crossovers right now," Abuelsamid said. "Even Jeep has a hybrid in the new Cherokee."
GM's only U.S. hybrid offering is a gas-electric Corvette priced at nearly $210,000. GM's most notable past hybrid offering was the Chevy Volt, which launched in 2010 and was canceled in 2019 due to low sales.
"They will often be at the very leading edge of a technology but not realize and not commercialize it," auto industry analyst John Murphy said.
The automaker has been showcasing its tech ambitions and plans through events such as this month's GM Forward presentation in New York City, where executives touted offerings like the new OnStar AI assistant debuting on the 2027 Cadillac Lyriq crossover SUV and new software-defined electrical architecture starting with the 2028 Escalade IQ full-size SUV.
GM also announced it would move from the New York Stock Exchange to the Nasdaq on Nov. 17 in a play to burnish its tech credentials, boost its share price and likely be included in the Nasdaq 100 index. Those moves come as the automaker derives much of its profit from sales of large gas-powered trucks, which have posted sales gains this year.
GM's reentry into hybrids is "an exact rifle shot at the right segment," said Murphy, managing partner of Murphy Automotive Partners. "There’s still time for them to put out good product and maintain market share in key segments and products."
Abuelsamid said GM is well positioned to compete in the hybrid sector if it can offer "a good hybrid Equinox that gets 37-40 miles per gallon."
"I don't see why it couldn't help gain them some sales, especially in the absence of anything from Ford, and even Stellantis right now is kind of in between," he said. "They've got the Cherokee, but the Cherokee's current generation has moved up a market segment."
Barra and other GM executives have repeatedly said the company's long-term plan centers on EVs, even after sales slumped following President Donald Trump's reversal of federal incentives and standards aimed at promoting electrified cars and trucks. But Abuelsamid said hybrids will be a key bridge as automakers wait for U.S. interest in EVs to scale up.
"Long-term, they're committed to going the EV path," Abuelsamid said. "But it's going to take them a while. It's going to take a while for that to really pay off for GM, and in the near term, they need to be more competitive in terms of fuel efficiency. Right now, in that compact crossover segment, they don't have anything to offer from a fuel-efficiency standpoint that competes with the rest of the market."
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