Hybrids – and Even EVs – Are Propping Up the U.S. Auto Market

Sales of new vehicles remained steady in May. But despite conventional wisdom that the battery-electric market is dying, buyers showed renewed interest in electrified models, including EVs and hybrids. Headlight.News has more.

Pres. Donald Trump has taken a decidedly anti-EV stance since returning to office in January 2025, among other things pushing Congress to phase out federal tax credits. But May U.S. vehicle sales show that the war on Iran, which has triggered a roughly 50% increase in gas prices, has encouraged American motorists to rethink the benefits of all-electric drive technology, along with plug-in and conventional hybrids.

Subaru, Honda, Kia, Genesis and Hyundai all reported modest sales gains for the month, when compared to May 2025 when the uncertainty around tariffs began to rattle the sales picture around the industry. Asian manufacturers, Toyota in particular, saw a surge in demand for electrified products.

The question is whether that resurgent interest in EVs and other battery-based powertrains will continue as fuel prices have dipped as much as 20 cents a gallon, on average, over the last week.

Toyota sees sales dip

With the war with Iran, rather than tariffs, dominating the news in May of 2026, Toyota Motor North America reported May 2026 U.S. sales of 238,800 vehicles, which were down 0.6% on a volume basis.

Toyota Division sales were stable for the month, going neither up nor down, but Lexus Division dropped 3.9% on a volume basis last month, the automaker said.

What stood out, however, was the fact that TMNA’s electrified sales totaled 137,031 vehicles, up 15.3% on a volume basis representing 57.4% of total sales volume for the month of May.

And Toyota wasn’t alone in experiencing a surge in demand for electrified products.

Late to the party pays off for Subaru

Subaru was slow to embrace electrified technologies, including both hybrid and all-electric drivetrains. It’s rapidly expanding its EV line-up, however, with the help of Toyota which partnered with the smaller Japanese automaker on models like the original Subaru Solterra and newer Uncharted and Trailseeker.

Subaru of America reported 57,748 vehicle sales for May 2026, a 10.4 % increase compared to the previous year. Subaru’s family of hybrid and electric vehicles made a growing contribution, accounting for nearly 25% of last month’s demand.

Jeff Walters, Subaru President and Chief Operating Officer, said “As we head into the summer road trip season, demand is strengthening across our lineup, reflecting the trust customers place in our vehicles. From our versatile gas, hybrid, and growing portfolio of EVs, Subaru is helping drivers explore more with the people that matter most to them.”

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 Honda gains as passenger cars become more popular

Honda brand sales totaled 135,688 units for the month, up 10.5% over May 2025, driven by sales of affordable and fuel-efficient passenger cars and light trucks, including record hybrid sales. Acura brand sales totaled 13,215 units in May, up 4%, for its best sales month of the year, driven by strong sales of gateway models and SUVs – led by MDX.

Honda passenger car sales topped 46,000 units, their best sales month in 5 years. Civic led the way with its best sales since June 2021, Accord scored its best month since May 2023. While the all-new Prelude continues to achieve its sales goals as a low volume specialty model.

Few manufacturers have gone into EV retreat as aggressively as Honda which abandoned plans to launch its new 0 Series line-up in the U.S. while also scrapping an EV manufacturing hub in Ohio, On the other hand, the automaker is rapidly expanding its hybrid line-up. That paid off last month as HEV products set a new monthly sales record of 42,583 units, led by CR-V hybrid. The compact crossover set a new May sales record of its own, accounting for 54% of model sales in May, with Accord at 50% hybrid mix and Civic sales at 31% hybrid.

South Korean brands take on more market share

With 80,502 units sold in May, fast-growing Kia America continues to reach new heights, dealers reporting increased sales of 11% over May 2025. The brand beat its previous retail record set in August 2025. In addition, Kia achieved a new year-to-date overall sales record of 360,220 total units sold through the first five months of the year, marking a 2% increase over the first five months of 2025.

Kia’s hybrid and all-electric models delivered their highest monthly and best-ever May year-to-date sales totals in company history.

“Even as consumer preferences continue to evolve, Kia continues to break retail, monthly and year-to-date sales records thanks to our wide range of ICE, hybrid and electrified models.” said Eric Watson, vice president, sales operations, Kia America.

Battery power pays off for Hyundai

Genesis, the South Korean-based luxury division of the Hyundai Motor Group, also posted its best-ever May as the brand’s sales climbed 3%.:

Hyundai Motor America reported May total sales of 87,468 units, a 3% increase compared with May 2025. It was a strong sales performance across the Hyundai lineup, according to the company officials.

Electrified vehicle sales continued to drive overall growth, highlighted by the best ever hybrid vehicle sales month, up 90% year-over-year. The Tucson Hybrid was up 10%, Santa Fe Hybrid sales rising 30%. While the Sonata HEV gained 250% year-over-year.

“Hyundai achieved growth across nearly every part of our lineup in May, from sedans to SUVs, including both hybrid and electric models,” said Randy Parker, president and CEO, Hyundai Motor North America.

Uncertainties abound

Analysts, however, have noted the combination of rising prices, economic uncertainty, and growing concerns about inflation are fueling fears about where the economy could be headed next and putting increasing pressure on the decisions of potential buyers of new vehicles.

Hybrids have benefits from increasing sales for several years, even while EV demand tumbled after tax credits were phased out in September 2025. There seems little likelihood HEVs will flatten out, especially with more products coming to market.

The question is whether the current rebound in EV demand will fade when – or if – gas prices begin sliding back to pre-Iran War levels, observers caution.

Paul A. Eisenstein contributed to this report.