Pool/Getty Images
Back in 2022, Tesla CEO Elon Musk dismissed hybrids as a “phase” and said it was “time to move on.”
Three years later, they’re only getting more popular. Sales of hybrid electric vehicles have surged in Europe and the US in the first half of the year, handing a boost to Tesla’s rivals as the company battles a sales slump.
In Europe, plug-in hybrid sales surged 52% in July compared to the same period last year, according to data from the European Automobile Manufacturers Association (ACEA) released on Thursday.
In the US, meanwhile, sales of hybrid electric vehicles — which are charged directly by a combustion engine and do not have a charging port — were up nearly 20% year over year in July, according to data from the Argonne National Laboratory, while sales of battery EVs and plug-in hybrids remained flat.
The enduring popularity of hybrids comes as Tesla, which only sells pure battery electric vehicles, faces a global sales slump.
Tesla’s sales in Europe, its third-largest market, fell 40% in July compared to the previous year, per ACEA data, despite overall battery electric vehicle sales growing.
Tesla was again outsold in Europe by rival BYD last month, with the Chinese automaker’s sales surging nearly 300%.
BYD’s success comes despite the 17% tariff the European Union imposed on the company as part of a wider crackdown on imported Chinese EVs last year.
This tariff only applies to battery electric vehicles, however, not hybrids, and BYD has responded by doubling down on multi-powertrain models in Europe.
BYD’s top seller in the first half of 2025 was the Seal U, a $44,500 hybrid that it launched in Europe last year. The company is set to unveil a new “Touring” version of its Seal 6 hybrid SUV with a 935-mile range in Germany next month.
Analysts previously told Business Insider that the company was shifting its strategy toward hybrids as it sought to mitigate the effects of the EU’s tariffs.
Tesla’s sales in the US are also struggling, falling around 12% year-over-year in the second quarter per data from consultancy firm Cox Automotive.
The Musk-led automaker has reported underwhelming global deliveries so far this year on the back of a stale product lineup and public backlash over its CEO’s outspoken political interventions.
The post Tesla’s European rivals have a secret weapon: hybrids appeared first on Business Insider.
