It took a gas price above $4 to change how Americans shop for cars. Since the war with Iran began in late February, fuel costs have climbed, and buyers who spent years choosing big trucks and SUVs are now asking about mileage. The third-quarter sales numbers show who was ready for that question and who wasn’t.
The numbers
Hyundai’s hybrid sales rose 39% in the quarter. Kia’s more than doubled, up 152%. Toyota’s electrified vehicles, which include hybrids, grew about 28.5% and made up 57% of its total sales. Honda’s hybrid sales rose 21%.
Ford, by contrast, saw sales fall 6.6% to 509,764. Hyundai and Kia together sold 506,200, up 5.4%, which was close enough to Ford that the two Korean brands nearly passed it for the first time ever. Ford counters that Hyundai and Kia are separate companies, and most analysts group them anyway. GM still leads the market, but its sales fell 5.5%, and Toyota is now less than 136,000 vehicles behind it for the year. Cox Automotive estimates that Asian brands sold more than half of all new cars in the quarter, while the Detroit Three fell to about 36% combined.
Why Detroit is stuck
The gap comes down to product. Ford offers few hybrids, mostly pickups, and it dropped the hybrid Escape; Escape sales fell 85% in the quarter as the remaining inventory sold out. GM’s only hybrid is a version of the Corvette. Stellantis said in January that it is phasing out its plug-in hybrids in North America. Ford and GM both plan more hybrid models, but a new car takes years to develop, and the demand is here now.
For decades, Detroit trimmed small sedans and efficient cars in favor of large trucks and SUVs, where profit margins are higher. That worked while gas was cheap. Asian automakers kept building efficient cars throughout, and they first gained ground in the US during the oil shock of the 1970s.
Hybrids are beating EVs
The winner here isn’t the electric car. Pure EV sales have dropped sharply over the past year. The $7,500 federal tax credit ended last September, and Tesla’s third-quarter sales fell 2%. GM’s EV sales fell about 62%, according to industry reports. A hybrid costs far less than an EV and needs no charger, which makes it the easier step for a buyer who just wants lower fuel bills.
Ivan Drury of Edmunds calls it a clear example of consumers picking the option that fits their needs at a lower price. Hybrids hit a record 16.3% of registrations in the second quarter, according to Cox, and the third quarter points higher.
The risk Detroit can’t fix quickly
The bigger danger for American automakers is loyalty. Drury points out that repeat customers are the lifeblood of the industry, and that winning back a buyer who has switched brands is the hardest thing a carmaker can do. A shopper who buys a Toyota or a Kia this year will probably look at the same brand next time.
The policy picture adds a twist. Days before the sales reports, the Trump administration announced looser fuel-economy requirements, which could save Detroit money on penalties for missing targets. On Friday, 26 states led by California sued, arguing the rollback weakens standards and hurts consumers. Looser rules reduce the pressure to build efficient cars at the exact moment the market is demanding them.
The oil shock of the 1970s gave Asian brands their first foothold in America. The 2026 gas spike may be doing it again, with the Detroit Three starting from a weaker position.