Electric vehicle sales in Colorado flattened out in the second quarter of 2023, but the state’s growing affinity for hybrids like Toyota’s RAV4 and Highlander, and the Honda CR-V, continued to push overall alternative-fuel car sales to new heights.
Car dealers and state officials track the combined sales of battery-electric vehicles and plug-in hybrids, which both count as low emission vehicles under state-mandated sales quotas, and hybrids. Hybrids do not qualify for the clean fuel mandate, but their combination of gasoline fuel with a battery charged by regenerative braking can get up to 75 miles per gallon.
The three alternative categories together made up 22.2% of overall new car registrations in Colorado in the first six months of 2023, compared with a 17.4% market share in the same period last year. Each point of market share represents thousands of cars, as Coloradans are on pace to buy about 208,000 new cars, SUVs and light trucks this year.
Combined sales of full battery-electric EVs and plug-in hybrid EVs flattened to 13.1% of market share compared with 13.2% in the first quarter of 2023. That leveling came even as many EV makers lowered prices to boost sales and stay competitive. In a move that won’t show in sales figures until the third quarter, Ford cut the price of its lowest-cost F-150 Lightning electric pickup to about $50,000 from about $60,000.
After years of waiting lists, EV inventory in some brand names is now piling up at dealerships, according to the information firm Cox Automotive. Carmakers, dealers and EV proponents will have to redouble efforts to overcome consumer price perception, range anxiety and other barriers to faster adoption, analysts said.
With nearly 90% of Colorado light vehicle sales focused on pickups and SUVs, state buyers have been waiting a long time for their favorite nameplates to start showing up as electric four-wheel drives, said Matt Groves, CEO of the Colorado Auto Dealers Association, which compiles registration totals.
“Electrifying vehicles that size requires significantly more raw materials. When demand on those materials is so high, the market can only produce so many,” Groves said. “The hybrid SUVs are a great way to make a tangible impact on today’s air quality while manufacturers secure a more robust pipeline of lithium, cobalt and the other materials necessary to mass produce larger batteries.”
Hybrids were 9.1% of the Colorado market in the first six months of the year, up from 7.6% last year. The RAV4 is the most popular, at 16% of the hybrid category, with the larger Highlander accounting for another 6.3% of sales. Honda’s CR-V hybrid is 9.8% of that category, with the Kia Sportage at 6%. The staid Prius doesn’t even make the hybrid top 10 anymore.
The great fuel economy and long range of most hybrids will keep them an option for some buyers as the EV market continues to ramp up, said Travis Madsen, transportation program director with the nonprofit Southwest Energy Efficiency Project.
“For people that really want to buy a gasoline vehicle for whatever reason, hybrids can make sense because they have lower fuel costs than conventional combustion,” Madsen said.
But hybrid buyers should be aware, he added, that with the new federal and state EV tax credits kicking in, the consumer’s final price of an EV is now much more competitive with gas or hybrid cars, and will be cheaper to operate annually. The Tesla Model 3 should qualify for both the $7,500 federal credit and the $5,000 state credit, he said, while a hybrid like the Prius does not.
Another “bridge” car type, the plug-in hybrid, will become more important as Colorado regulators consider even tighter clean car rules later this year, Madsen said. The Air Quality Control Commission, which has already set dealer sales quotas for clean fuel cars, will consider adopting a “Clean Cars II” rule further defining sales targets in coming years. The rules, which originated in California, would require 82% of Colorado car sales to be clean fuel by 2032.
“That rule envisions a continued role for plug-in hybrids,” Madsen said. Plug-in hybrids have a gas engine and tank, but also a larger battery pack than a hybrid and can drive on electric alone for short trips.
“The rule allows automakers to meet up to 20% of their compliance obligations with plug-in hybrids, as long as they can go at least 50 miles on electricity alone,” Madsen said.
“Regular hybrids won’t count toward compliance. Nor will regular gasoline cars,” he said. “In the long run, I think we’ll see more EVs, fewer regular hybrids, and a continued role for plug-in electric hybrids.”