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Toyota Threatens GM’s Sales Crown as Hybrid Demand Surges
Market Share for Toyota Is Expected to Grow 15.8% in H1
Key Takeaways:
- General Motors faces a challenge to its long-held U.S. sales lead as Toyota gains share on strong hybrid demand, narrowing the gap in early 2026 forecasts.
- The shift reflects consumer preference for fuel-efficient hybrids over EVs, with Toyota offering more than 20 hybrid models while GM focused heavily on all-electric vehicles.
- GM may respond with incentives to defend its position as rising fuel prices and declining truck and SUV sales reshape competition in the U.S. market.
General Motors Co. is facing an uncomfortable reality: Toyota Motor Corp. has a shot at taking the U.S. sales crown once again thanks to growing demand for its gasoline-electric hybrids.
The Japanese automaker is expected to grow its market share to 15.8% in the first half of this year, while GM’s share is expected to tumble by almost 1 percentage point to 16.8%, according to a forecast from researcher Cox Automotive. If consumers continue to flock toward fuel sippers, Toyota has a shot becoming the No. 1 auto seller in the U.S. this year.
“Toyota has a chance,” said Charlie Chesbrough, senior economist for Cox. “We’re not predicting it yet, but it’s possible. Consumers are interested in hybrids and GM can’t compete.”
Still, Chesbrough expects GM to put up a fight. “They would use incentives to try to keep it.”
Toyota overtaking GM in the Detroit automaker’s home market would mark a historic shift. GM has held the top spot since passing Ford Motor Co. in 1931, losing to Toyota once in 2021 due to the semiconductor shortage. It would also underscore that GM CEO Mary Barra’s big and risky bet on EVs over hybrids was a mistake, as American buyers aren’t ready to go all electric.
Through May, Toyota’s sales of electrified vehicles, which includes battery-powered cars but are predominantly hybrids, rose 5.6% in a market that is expected to fall this year.
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(Megan Varner/Bloomberg)
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Industrywide sales of full-size trucks and SUVs, where GM and Ford are strongest, are both down as the war with Iran has pushed the average price of gasoline to almost $4 a gallon.
Toyota offers hybrids on more than 20 models in its U.S. lineup. GM has only the electrified Corvette and Ford offers a hybrid on only the Maverick small pickup, F-150 and Lincoln Nautilus SUV.
“Toyota stuck with the idea that you have to have a big portfolio,” Chesbrough said. “They have midsize cars, compact cars. The Detroit three are focused on more specific vehicles.”
GM made its big bet on EVs starting eight years ago at a time when Tesla Inc.’s sales and stock were surging and regulators across the globe were tightening emissions rules. For GM, hybrids were an expensive interim solution, so Barra decided to go bigger on all electric models.
“For EVs, it was pleasing Wall Street,” said Stephanie Valdez Streaty, director of industry insights at Cox. “We want to get that valuation like Tesla.”
Ford also has risk of losing its No. 3 spot to South Korea’s Hyundai Motor Co., which offers several hybrids. Cox predicts Ford’s market share will tumble a point to 12.6% through the first six months of 2026, while Hyundai should climb to an estimated 11.7%.
