Americans Are Buying Hybrids At Record Levels For One Very Good Reason

Not to toot-my-own-flute, but I did call 2024 “the year of the hybrid,” and it’s nice to suddenly have some data to back that up. When people who currently own gas-powered cars are going into the market, some of them are buying EVs, but way more are buying hybrids of all varieties. Hybrids offer a lot of advantages, and I’m guessing the biggest one might actually surprise you.

Speaking of surprises, Ford was surprised that their own survey shows that a lot of people would take a 20% pay cut for a little more work/life balance. You know who might want that 20%? People with college loans to pay, which is about to be an issue both in the upcoming election and for people in the business of selling cars.

And, finally, The Morning Dump will end with one of the greatest firings of all time by an F1 team, and I ain’t talking about Guenther Steiner. He’s still alive. Another F1 team literally pulled the plug on one of its employees and trust me, it’s deeply amusing.

The Stat About Hybrids That Surprised Me This Morning

Hybrids have made quite the transition in the last few years in the eyes of consumers and enthusiasts. There was a time when many of us derided the miserly, hair-shirt nature of Prius ownership. Then something happened. I’m not sure if it was the rise of electric cars or the vast improvement in hybrid technology, but enthusiasts are starting to wake up to the idea of hybrid ownership.

My next car, I think, will be a hybrid. Plenty of enthusiasts I know are enamored with the idea of the new, sleeker Toyota Prius.

I said that 2024 was going to be the Year Of The Hybrid for a number of reasons, including the fact that the electrification adoption curve was beginning to slow. Choice, also, was a big reason. Both in that consumers have great choices like the Toyota Corolla Cross and, at the same time, don’t have a choice when it comes to the new 2025 Toyota Camry (which is going all hybrid). There are also some exciting cars on the horizon like the upcoming Honda Prelude Hybrid.

So, here are some good reasons why people buy hybrids:

• They want to be green.
• They are unsure about committing to an EV or unable to
• Hybrids, especially Plug-In Hybrids, are better than they’ve ever been
• The car they want might only come in hybrid form (like the Sienna)
• They want to spend less on gas.

All of these reasons have led to quite an important moment in history: ICE households are switching to hybrids at a record rate of 9.9%, compared to just 5.7% for pure electric vehicles according to this S&P Global Mobility report that looks at purchases between January and October of last year. That’s an interesting stat, but that’s not the one that caught me off guard this morning and I think explains a lot of what’s going on here:

Year to date, gasoline households who acquired another gas model have an average monthly payment of $675 on their new vehicle, according to AutoCreditInsight by S&P Global Mobility and Transunion. Those who bought a full hybrid pay $670, slightly less than their gasoline counterparts. However, households who opted for PHEVs have a higher average monthly payment of $798, and those who chose an EV pay the highest at $828. The data suggest that cost considerations could be a significant factor driving the preference for hybrids over other EVs.

That’s a huge deal. The sense was growing that price parity between hybrids and gas-powered cars was coming, but now it’s clearly here. Look at this little graphic:

If you’re going from a gas-powered car to a non-PHEV hybrid you’re probably paying less per month than if you went with a gas-powered car. You’re paying more for a PHEV and a lot more for an electric car.

This may sound unlikely, but it makes sense when you start to consider what people might otherwise purchase. The cheapest version of the Ford Maverick, for instance, was a hybrid for a while and even if it costs a little more now, I can imagine people buying a Maverick Hybrid instead of a new, more expensive Ford Ranger.

The two most popular non-PHEV hybrids among owners of gas-powered cars are the Honda CR-V Hybrid and the RAV4 Hybrid, both of which start within 5-10% of the non-hybrid models. If you’re stepping down from a Honda Pilot or a Toyota Highlander and choosing then you’re not losing that much space and gaining a lot of efficiency.

Looking at the chart, it’s clear where the trend is going. It’ll be interesting to see how long that trend holds.

Ford: 52% Of People Would Take A 20% Pay Cut For More Work-Life Balance

Ford, in its attempt to understand humans, did a global survey of about 16,000 people to find out what they care about. It turns out that they care about having a work-life balance.

You can go to the microsite to see all of their discoveries, but the biggest fact that stood out is that 52% of workers would be willing to take a 20% pay cut to “achieve a lifestyle that prioritized my quality of life.” Without getting into too much detail, that’s sort of what I did to come work here! No regrets.

Unsurprisingly, there’s a generational aspect to this. Here’s the breakdown of responses to that question from American respondents:

• Gen Z: 56%
• Millennials: 60%
• GenX: 43%
• Boomers: 33%

There is a bit of me that feels like Jodie Foster and I want to scream: THE KIDS ARE SOFT. But I’ve burned myself out and seen my friends burned out over a job that, frankly, didn’t care about them. Also, it’s not a surprise that Millennials feel this the most, as many are at a point in the middle/upper management part of their careers where the striving is highest and the responsibilities match. I have friends who have to take care of themselves, their kids, and their parents all at the same time and balance is something they seriously lack.

My guess is that many GenXers are filling up retirement accounts and reached a professional level where the work might be hard, but they already either balanced it out or died trying. Boomers, obviously, are maybe retired so it’s not as relevant a question.

Also, 51% of people are afraid of AI according to this survey.

It’ll be interesting to see how Ford uses this data, but here’s a clue from a Detroit Free Press report on the survey:

“It shocked us. I’ll be honest,” said Jen Brace, chief futurist at Ford who coordinated the 2024 Trend Report and its findings. “A 20% pay cut is a big deal. I didn’t think we’d get the level of response in terms of number of people; 52% is huge. If you look generationally, and if you look in the U.S. in particular, you saw our younger generations being even more willing to give up money for a better quality of life.”

So if you work for the company and want to work less, maybe offer to trade one day for 20%.

Of course, there’s a real privilege built into this. If you’re working minimum wage the reality is you probably don’t have a great work-life balance and there’s no way to achieve more balance by having less money.

36% Of Consumers With A Student Loan Took An Automotive Loan While Repayments Were Paused

As part of this country’s response to the pandemic, federal student loan repayments were paused. During that time, about a third of consumers with federal student loans took out an automotive loan.

That’s not a big deal except, with car prices hitting record highs during that period, those buyers likely still have those car payments.

From Automotive News:

The combination of overall increased costs and debt is straining young consumers, said Travis Bowie, general manager of auto finance at insurance company Jerry. In a December survey using Pollfish, Jerry found 28 percent of 1,268 Gen Z respondents said they were more than 30 days late on a debt or rent payment because of the cost of car ownership.

“I don’t really see an option where this gets any easier, at least until the car prices start to come down,” Bowie said. “I think we are probably going to still see elevated delinquencies and defaults in the months ahead.”

As of May, 40.6 million people had student loans totaling $1.6 trillion, according to TransUnion. The average student borrower has about $35,000 in debt, and some consumers have monthly payments of over $500.

I’ve talked before about loan vintages and how there’s a particular set of vintages from the pandemic that people in the industry are worried about because of the bad combination of super high prices, increasing interest rates, and the sudden depreciation of vehicle value. Well, just toss student loans on the pile of reasons why even a soft-landing-style recession might not be great for the auto industry.

Additionally, this could further damper car purchases in 2024.

Mahindra Kills Its Global AI Ambassador

 

In what has to be one of the most amusing and quick own-goals in racing history, Mahindra has killed its just-launched AI influencer. It all started a few days ago when Mahindra Racing, which competes in Formula E (the traveling business conference dressed up as a racing series), decided that it needed an influencer to talk about “positive change” and be the company’s “Sustainable Tech Champ.”

How using a computer brings about sustainability and helps save energy is… uncertain. There’s a sense that everyone needs to be an AI company and use AI because, frankly, many of the people who work in the C-Suites at major companies are just as dumb as we all are and their whole job is not to create any value but seem like they’re creating value for equally dumb venture capitalists and so nonsense like this prevails. [Ed Note: Jeez, Matt, tell us how you really feel! -DT]

Should Mahindra get credit for killing its AI influencer? Nah, that credit probably goes to our old pal Devin Altieri, a motorsports PR professional who pointed out the obvious in a tweet:

Mahindra creating an AI team ambassador that is a woman instead of simply hiring one real, actual woman to fill that role is so incredibly messed up.

After that death blow, which went viral around the racing scene, Mahindra had no choice but to end Ava’s life, stating: “Your comments hold tremendous value. We have listened, understood and decided to discontinue the project.”

Don’t feel too bad. Ava isn’t a real person. Her death means nothing other than Mahindra listened to people, apologized, and moved on, which is about all you can ask.

What I’m Listening To While Writing TMD

“New Blue Sun” the weird, wonderful debut solo album from Andre 3000 that’s just him playing the flute. I’m serious.

The Big Question

In reference to Ford’s study: Would you take a 20% drop in pay to have more work-life balance?