Hybrids Forecast to Reach 32% of U.S. Sales by 2035

Hybrids are playing a larger role in how Americans move toward electrified vehicles. A new report from the Auto Care Association and MEMA Aftermarket Suppliers forecasts substantial hybrid sales growth over the next decade. Meanwhile, U.S. battery electric vehicle (BEV) adoption continues at a slower pace than in China and Europe.

Developed with Strategy&, PwC’s strategy division, the 2026 Joint Powertrain Trends & Outlook Forecast projects significant growth for hybrids. Their share of U.S. new-vehicle sales will increase from 17% in 2026 to 32% in 2035. The report also forecasts BEV market share will rise from 8% in 2025 to 25% in 2035.

The findings point to a transition that includes an important hybrid phase before BEVs become more prominent.

Hybrids Lead Key Powertrain Forecast Findings

The report highlights five key trends:

– Hybrids are gaining share. The report forecasts hybrids will account for 32% of U.S. new-vehicle sales in 2035, compared with 17% in 2026.

– U.S. BEV adoption trails other markets. BEVs accounted for approximately 6% of U.S. new-vehicle sales in the first half of 2026. That compares with 38% in China and an estimated 23% in European markets.

– Price remains a hurdle. Automakers are placing greater emphasis on models priced below $45,000, a segment that accounts for more new-vehicle sales.

– Hybrids can cost less to own. Despite higher purchase prices, hybrids have lower three-year ownership costs than comparable internal combustion engine vehicles. Lower fuel costs and higher residual values contribute to the difference.

– Buyers will have more choices. The report expects the number of hybrid models to triple between 2025 and 2035. These include full hybrids, plug-in hybrids and range-extended vehicles.

What the Forecast Means for the Aftermarket

The report also puts the powertrain shift in the context of a growing aftermarket. The U.S. light-vehicle aftermarket, including warranty and post-warranty activity, will grow from $543 billion in 2026 to $733 billion in 2035. That represents an increase of approximately $190 billion, or 3.4% annually.

Consumers’ “repair, don’t replace” response to the cost of new and gently used vehicles drives growth. Price and product mix also contribute to growth as vehicle population growth remains modest.

Within the post-warranty market, the report forecasts parts revenue associated with electrification will grow approximately 24% annually through 2035. It also projects ADAS hardware revenue will grow approximately 23% annually.

Industry Leaders Discuss the Transition

“The shift toward electrification is not happening in one straight line,” said Philip Atkins, director of strategic research and planning at MEMA Aftermarket Suppliers. “Hybrids are becoming a bigger part of the picture, and suppliers need to plan for that reality. The mix of vehicles on the road will keep changing, and understanding where that demand is headed will help companies make better decisions about products and investment. This report will help companies do that.”

“Price and choice matter to consumers, and the forecast makes that clear,” said Michael Chung, executive director of market intelligence at Auto Care Association. “As more hybrid models become available and automakers focus on affordability, the market is responding. This research helps aftermarket businesses understand the vehicles they will be serving in the years ahead.”

Report Availability

Auto Care Association and MEMA Aftermarket Suppliers members can access the 2026 Joint Powertrain Trends & Outlook Forecast as a membership benefit.

Nonmembers can purchase the report at digital.autocare.org or mema.org.