The hybrid does not replace the larger engine, but rather replaces the upgrade path

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whom Technical CleaningWe prefer fully electric cars to hybrids. I’ve driven EVs for 16 years, but I like to meet people where they are and many people just aren’t ready to make the switch, even though it could work well if they were willing. I wrote about this 3 months ago here and I wrote about this from the automakers point of view a month ago here. This article is from the point of view of consumers.

I want a luxury car with a discount

For a hundred years, the upgrade path was simple: you wanted more power, you bought a bigger gasoline engine. More cylinders, more displacement, more money and worse fuel economy as the price of entry.

I made that exact trade-in in 1998. I owned an older Toyota Camry, had a new job with a pay increase, and had always been concerned about fuel economy after growing up during the oil embargo of 1973. I tested a couple of Lexuses (the GS300 and GS400 for around $40,000 and $50,000), and they were smooth, powerful, and refined. But they were double what I normally spent on a car. Then I looked at the Camry and the Honda Accord, both around $20,000 for the top 4 cylinder model with leather. They were similar, but I liked the Accord because it was a little sportier.

I was about to buy the four-cylinder when I asked the dealer if I should try the V6. He said everyone who tries the V6 ends up buying it. I didn’t know if that was sales talk or reality, but I tried it and bought it. It cost about $2,500 more and got less fuel economy.

Here’s what really sold me: At $25,000, it handled very similar to those $40,000 and $50,000 Lexuses. Smooth, powerful, refined. The four-cylinder met my needs; It would have taken me from place A to place B. But it didn’t look like a luxury car. The V6 did it.

That was the upgrade path that worked exactly as designed. More money, more power, less fuel economy. The reason was never really fuel economy anyway. It was about smoothness, refinement and the feeling that the car was effortless.

Situation 2027, everything has changed

Fast forward almost thirty years. I was listening to “Talking Cars,” the Consumer Reports podcast, and they were talking about the new 2027 Kia Telluride Hybrid. The thesis was simple: It only costs a couple thousand more than the non-hybrid, but it drives much better (smoother, better acceleration) and dramatically increases fuel economy. It reminded me of my story from almost thirty years ago, when I did the same update. I had paid more for smoothness, power, refinement and even endured reduced fuel economy. Now you get the best of both worlds. You get refinement and considerably better fuel economy.

The numbers back it up. The Telluride Hybrid makes 329 horsepower from a 2.5-liter turbocharged four engine combined with electric motors, compared to 274 for the gasoline version. The front-drive EX is rated at 35 mpg combined, versus 22 for the gas EX. That’s 13 mpg better and makes 55 more horsepower. The Hybrid starts at $46,490, about $7,300 more than the base gas LX, but the Hybrid bypasses the two cheaper versions entirely, so when comparing comparable EX versions, the gap is only about $2,700.

But fuel economy isn’t the whole story. The part that really matters is the step. When you need to go from 45 to 65 to overtake a car, a gasoline car makes you step on the pedal, wait for the gear to downshift, wait for the engine to accelerate. With a hybrid or electric, the power is there. It can take half the time to build speed for passing, which is much better than a few extra horsepower would lead you to think.

And there is the sound. The engine of a gasoline car makes an annoying noise: a whining noise that indicates that the engine is working hard. A good hybrid is almost silent. Effortless power. That’s the same refinement I was buying with the Accord V6 in 1998. The 4 cylinder Accord made that strained sound. The hybrid makes it disappear.

In reality, the hybrid is not a replacement for the larger engine. It is overriding the update path. The old way was displacement. The new path is electrification. The same reason (softness, power, refinement) opposite result. In 1998, you were paying $2,500 more and 4 mpg less fuel economy. Now, you pay about $2,700 more and get more power and 13 mpg better economy.

Conclusion

Obviously this is just one path to full electrification, but I call hybrids the gateway drug to electric cars, so they’re a step in the right direction! For the first time in a hundred years, what makes a car look refined doesn’t cost you at the pump.

Disclosure: I am a Tesla shareholder [TSLA] and XPeng [XPEV]. But I am not offering any investment advice of any kind here.