The 2026 Toyota RAV4 Plug-in Hybrid GR Sport at the Vancouver Auto Show in March. (James Macdonald/Bloomberg)
key takeaways:
- General Motors faces a challenge to its long-held U.S. sales lead as Toyota gains share on strong hybrid demand, narrowing the gap on forecasts as early as 2026.
- The shift reflects consumer preference for fuel-efficient hybrids over EVs, with Toyota offering more than 20 hybrid models while GM has focused heavily on all-electric vehicles.
- GM may respond with incentives to defend its position due to rising fuel prices and declining truck and SUV sales in the US market.
General Motors Co. faces an uncomfortable reality: Toyota Motor Corp. has a chance to once again take the U.S. sales crown thanks to surging demand for its gasoline-electric hybrid.
The Japanese automaker is expected to grow its market share to 15.8% in the first half of this year, while GM’s share is expected to fall about 1 percentage point to 16.8%, according to a forecast by researcher Cox Automotive. If consumers continue to gravitate toward fuel sippers, Toyota could have a chance to become the No. 1 auto seller in America this year.
“Toyota has an opportunity,” said Charlie Chesbro, senior economist at Cox. “We’re not predicting it right now, but it’s possible. Consumers are interested in hybrids and GM can’t compete.”
Still, Chesbro expects GM to put up a fight. “They will use incentives to maintain it.”
Toyota overtaking GM in the Detroit automaker’s home market would mark a historic shift. GM has held the top spot since surpassing Ford Motor Co. in 1931, losing to Toyota once in 2021 due to semiconductor shortages. It would also highlight that GM CEO Mary Barra’s big and risky bet on EVs over hybrid vehicles was a mistake, as American buyers are not ready to fully embrace electric vehicles.
During May, Toyota’s sales of electrified vehicles, which include battery-powered cars but are primarily hybrids, rose 5.6% in a market that is expected to decline this year.
(Megan Warner/Bloomberg)
More on Toyota
Sales of full-size trucks and SUVs across the industry, where GM and Ford are strongest, have both declined as the war with Iran has pushed the average price of gasoline to about $4 a gallon.
Toyota offers hybrids on more than 20 models in its US lineup. GM only has an electrified Corvette and Ford only offers hybrids on the Maverick small pickup, F-150 and Lincoln Nautilus SUV.
“Toyota is stuck on the idea that you have to have a big portfolio,” Chesbro said. “They have midsize cars, compact cars. The Detroit Three are focused on more niche vehicles.”
GM made its big bet on EVs eight years ago at a time when Tesla Inc.’s sales and stock were rising and regulators around the world were tightening emissions rules. For GM, hybrids were an expensive interim solution, so Barra decided to make the big move to all-electric models.
“For EVs, this was going to please Wall Street,” said Stephanie Valdez Streete, director of industry insights at Cox. “We want to get a valuation like Tesla.”
Ford also risks losing its No. 3 spot to South Korea’s Hyundai Motor Co., which offers several hybrids. Cox estimates Ford’s market share will fall one point to 12.6% in the first six months of 2026, while Hyundai should climb to an estimated 11.7%.
