When gas prices shot up in the first half of 2022, so did demand for used electric vehicles. Their auction values rose accordingly. Used hybrid values also rose as demand for less gas-hungry vehicles surged. 

When gas prices began to ease, EV values at auction also softened, George Chamoun, CEO of online auction ACV, tells Auto Remarketing. Surprisingly, however, hybrids values held their own and have continued to do so. 

“For now, hybrids are king, that is where we are with consumers,” says Chamoun.  “Hybrids are standing up among the crowd.” 

The first hybrid vehicle sold in the modern U.S. car market, the Honda Insight, went on sale in 1999. But it was the Toyota Prius, released in the U.S. in 2000, that really introduced the segment to the mass market. 

The number of hybrid models on offer has grown steadily as have hybrid sales. In 2022, 801,550 hybrid vehicles were sold in the U.S., up 76% compared to the previous year, according to Wards Intelligence. Hybrids accounted for 5% f the light vehicle market in 2022. 

According to an iSeeCars.com study, Toyota claimed the four of the five top spots in US hybrid sales last year, nabbing first, third, fourth and fifth place with the RAV4 Hybrid, the Prius, the Camry Hybrid, and the Highlander Hybrid. The Ford Fusion landed at No. 2.

While they were once bought by early adopters, hybrids are rapidly becoming the choice of mainstream consumers, Karl Brauer, executive analyst at iSeeCars, tells Auto Remarketing. 

“It doesn’t hurt that automakers are producing more of these cars every year to help keep pace with rising EPA requirements,” he says. 

Brauer figures demand for hybrids will continue to surge. 

“As a less-expensive alternative to EVs (which have) limited infrastructure support, hybrids and plug-in hybrids make a lot of sense and consumers are rapidly realizing this,” says Brauer. 

Chamoun also figures consumers are becoming more comfortable with hybrids as more models become available. “When something is around long enough, you start to appreciate it,” he says. 

Dealers also have become more comfortable buying hybrids at auction, says Chamoun. Thus, while EVs followed a similar depreciation curve to traditional gas vehicles in the last half of 2022, hybrids retained their value.

“It shows the confidence dealers have in buying used hybrids,” says Chamoun. 

“Hybrids have become a great niche for dealers,” he adds. 

The growing number of hybrids has also made dealerships more comfortable servicing them, says Chamoun. They have a feeling that while EVs are something new, hybrids are “something I can trust.” 

And while EVs and gas vehicles are now close to parity from an auction price perspective, that doesn’t mean EV valuations won’t strengthen over time, says Chamoun. 

Dozens of new EV models are coming on to the market over the next few years. The wholesale market is already reflecting the arrival of more EV choices in the retail market. 

Tesla held on to the top spot for 2022 auction volume at ACV, says Chamoun, but Ford increased its market share to 8.49% YTD November, compared to just 2.75% in 2021. 

“In time, dealers will get more and more comfortable buying EVs,” says Chamoun. “Electric valuations could become stronger than gas in time.”