General Motors (NYSE:GM) faces a gap in its US vehicle lineup as demand for hybrid models increases, with some dealers reporting that customers are choosing competing brands offering more fuel-efficient options.
Florida car dealer Bill Wallace, who operates 16 dealerships representing brands including Hyundai, Kia, Mazda, Chevrolet and Cadillac, said most customers have recently been asking about hybrid vehicles.
While several of his dealerships offer a range of hybrids, GM’s Chevrolet and Cadillac brands primarily provide petrol-powered and fully electric vehicles. The Corvette sports car is currently GM’s only hybrid model.
“There’s no question that they’re losing market share,” Wallace said.
A GM spokesperson said the company’s “strategy is to build a stronger, more profitable business by delivering vehicles customers love.”
The automaker’s US market share declined to 16.8% in the first half of 2026 from 17.6% a year earlier, while Toyota and Honda gained share.
Hybrid Sales Increase as Petrol Prices Rise
US consumer interest in hybrid vehicles has increased alongside petrol prices, which have risen approximately 40% since the conflict involving Iran began in late February.
Hybrids combine a conventional combustion engine with a battery and electric motor to reduce fuel consumption.
The vehicles accounted for 19% of US retail vehicle sales in August, compared with approximately 16% in the months preceding the conflict.
Their share reached 20% in May, equivalent to one in five vehicles sold.
According to JD Power, hybrids sold from dealership inventories more than twice as quickly as conventional petrol-powered vehicles during the second quarter.
The increase in demand has encouraged manufacturers to expand their hybrid offerings, particularly in the compact sport utility vehicle segment.
GM’s Electric Vehicle Strategy Limits Its Hybrid Options
GM previously prioritised fully electric vehicles over hybrids, based on its expectation that the market would eventually transition to electric powertrains.
At a Barclays conference in 2019, Chief Executive Mary Barra described hybrids as an “interim solution.”
“Customers generally aren’t interested in hybrids,” Barra said at the time, explaining that GM preferred to move directly towards electric vehicles for environmental reasons.
By late 2024, following slower-than-expected electric vehicle sales growth, Barra said GM planned to introduce plug-in hybrids in North America by 2027.
In an interview with Fortune this month, she said the company would offer hybrids in important vehicle segments but did not specify a launch timetable.
Supplier sources and automotive forecasting firms expect GM’s next hybrid offering in the US to arrive closer to the end of the decade.
A GM spokesperson declined to comment on those projections.
GM has continued to generate profits from its petrol-powered trucks and SUVs, while its electric vehicle sales have been affected by changes in US government policy.
The company has also benefited from investor interest in its profitability, with its shares trading near record levels, although US vehicle sales have declined this year.
Toyota, Honda and Nissan Expand Hybrid Offerings
Other manufacturers have maintained or expanded their hybrid lineups as demand for fully electric vehicles has fallen short of earlier expectations.
Toyota, which introduced the Prius in the late 1990s, attributed part of its US sales performance this year to hybrid demand.
During the first half of 2026, electrified vehicles, primarily hybrids alongside fully electric models, accounted for more than half of Toyota’s sales for the first time.
The compact SUV segment has seen additional hybrid offerings, including the Toyota RAV4 and Honda CR-V.
GM sells conventional petrol-powered compact SUVs such as the Chevrolet Trax and Buick Envista but does not offer hybrid versions of those models.
Nissan is accelerating the launch of its hybrid Rogue compact SUV by several months, with availability planned for this autumn.
A Nissan spokesperson attributed the revised timetable to “growing consumer demand for hybrid SUVs.”
“Everybody’s coming up with a hybrid in that space,” said Srini Rajagopalan, vice president of customer success for OEM solutions at JD Power.
“This is becoming a little bit more than just a phase or a fad.”
Analysts Assess GM’s Longer-Term Strategy
Automotive analyst John Murphy of Murphy Automotive Partners forecasts that hybrids will account for 34% of US vehicle sales in 2031.
However, Murphy said GM’s emphasis on profitable petrol-powered trucks and SUVs remains commercially understandable.
He also noted that the company’s existing electric vehicle lineup could provide an advantage if emissions regulations become more restrictive in the coming years.
GM’s approach “is not as clear a major mistake as I think some people believe,” Murphy said.
New Jersey GM dealer David Ferraez said dealers remain reluctant to increase electric vehicle inventories because of difficulties selling the models.
“I’m hoping that GM can adapt and come up with a way to build hybrids,” Ferraez said.
GM’s future position in the hybrid market will depend partly on when it introduces additional models and how consumer demand develops across petrol-powered, hybrid and fully electric vehicles.