In a major milestone in the government-coerced push away from gas-powered vehicles, the best-selling sedan in America will only be available with gas-electric hybrid powertrains starting with the 2025 model year, Toyota revealed in Malibu on Tuesday night.
The 2025 Toyota Camry will feature a 2.5-liter gas engine paired with an electric drive that will deliver more power than the 2024 hybrids. Toyota is already the leading seller of hybrid vehicles, which, depending on the driving scenario, use only electric power, only gasoline, or both. Hybrids recapture energy from the braking system that helps boost the range.
It could be a very risky move for Toyota, considering that combustion models comprise about 85% of Camry's 2024 sales volume. The Camry is king of the sedan market. However, as Americans increasingly prefer crossovers and SUVs, total sedan sales have plummeted from 7.2 million a year in 2012 to just 2.9 million in 2022, notes the Wall Street Journal.
Toyota's radical shift comes in part because of a government gun held to manufacturers' heads. Whether consumers want it or not, the federal government is using regulation to force gas vehicles out of the marketplace by tightening average mileage requirements for manufacturers' fleets. Most recently, the White House proposed a 58 mpg standard for the 2032 model year. The 2022 average was 27 mpg.
While Toyota didn't disclose its 2025 pricing yet, at a time when Americans are reeling from inflation, cutting out gas-only models is likely to make the cheapest Camry more expensive next year. For the 2024 model year, the cheapest gas-only Camry is costs about $2,400 less than the cheapest hybrid. "We think the value the hybrid powertrain brings is worth that kind of premium," Toyota's North America brand chief David Christ told Reuters.
According to federal fuel economy numbers, the current Camry hybrid saves $650 a year versus the gas version, reflecting the 52mpg vs 32 mpg difference. That implies a 3.7-year break-even on the price differential between the hybrid and gas-only version. Critically, that math does not include:
- Extra interest expense for those financing a more expensive vehicle
- Higher sales and other taxes linked to the sales price
- Higher insurance costs -- on average, hybrids cost about 7% more to insure, according to carinsuranceplan.org
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