In a World of Larger Vehicles, Sedans Hold Steady

Alternative fuel vehicles continued to gain momentum in the fourth quarter of 2025, driven by expiring electric vehicle (EV) tax credits and a growing preference for options that bridge the gap between full electric and traditional gasoline vehicles. According to Experian’s Automotive Consumer Trends Report: Q4 2025, alternative fuel vehicles accounted for 38.6% of new retail car registrations in the last 12 months, with 11% battery electric (BEV) and 27.6% hybrids and plug-in hybrids (PHEVs). This signals that the narrative about growth in consumer interest for alternative fuel is increasingly towards hybrids, not just full EVs. Taking a deeper dive, the Toyota Camry Hybrid led all alternative fuel car models, coming in 31.7% in Q4 2025. Rounding out the top five were Tesla Model 3 (19%), Honda Civic Hybrid (10.1%), Honda Accord Hybrid (9%), and Toyota Prius (5.3%). Interestingly, the Toyota Camry also stood out as the top model in both new and used car markets in Q4 2025, holding 12.2% of new car market share and 6.3% of used car market share. The Honda Civic ranked second in new car market share, coming in at 10.5% this quarter, while the Honda Accord secured the second spot in the used car market at 5.8%. The prominence of these vehicles leading both new and used car markets reflects a combination of strong new-vehicle sales and sustained demand in the secondary market. Data in the report also revealed strong loyalty within Toyota and Honda, with significant inflow between the two brands. For instance, 38.4% of Toyota Camry buyers replaced their vehicle with another Camry in Q4 2025, and 39.7% of Honda Civic buyers replaced it with another Civic. These trends reinforce the value of dealers monitoring evolving consumer preferences and aligning inventory with vehicles that offer fuel efficiency and flexible powertrain options as the market continues to shift. To learn more about car insights, view the full Automotive Consumer Trends Report: Q4 2025 presentation.

Many across the industry have been waiting to learn how EV activity has changed now that the EV tax credit has been eliminated. According to Experian’s State of the Automotive Finance Market Report: Q3 2025, the EV market saw a sharp uptick in transactions as many locked in these benefits before they disappeared, though it remains to be seen what the market will look like in the fourth quarter. With the EV market expanding and more models entering the lineup, shoppers also benefited from various options across a wider range of price points within their budget. Even so, many opted to lease a new EV rather than purchase it. More than 56% of consumers leased an EV in Q3 2025, up from 46.43% last year. The gap between the number of EV leases and purchases reflects several underlying factors, one of them being this option likely offered lower upfront costs and monthly payments. For instance, the average monthly payment for a lease was $172 lower than a loan for an EV in Q3 2025. Where EV performance stands in the broader market When looking at the data from a larger perspective, EVs made up 25.31% of the total new lease market, compared to 17.69% a year ago. The alternative fuel type also comprised four of the top ten leased models, with Tesla Model Y (4.35%) and Tesla Model 3 (2.58%) as the top two. They were followed by the Honda Prologue (1.78%) as the fifth most leased model and the Hyundai IONIQ 5 (1.49%) as the ninth. EVs making up nearly half of the top ten leased models in the overall market underscores how quickly consumer preferences can shift and how incentives play a role in purchasing behavior. Consumers’ comfort with EV technology continuing to grow paired with the steady expansion of compelling models across segments also highlights the momentum that is being brought to the overall automotive industry. As the market continues to move forward, the interplay of expiring incentives, more model availability, and a strong desire for leasing shows how EVs have steadily become a more prominent consideration. Leveraging these insights will help automotive professionals best position themselves to support consumers navigating an increasingly dynamic landscape. To learn more about EVs and other automotive finance trends, view the full State of the Automotive Finance Market Report: Q3 2025 presentation on demand.

While Experian is known as a trusted source for credit insights, we have built a reputation for helping car shoppers, dealers, and lenders make informed decisions with confidence in the automotive space. Leveraging the value of data is key for identifying the latest trends in markets, behaviors, and industry changes. In fact, Experian’s Automotive Market Trends Report: Q1 2025 revealed the latest shifts in alternative fuel type registrations. Through the first quarter of this year, data found that growth in retail registrations for electric vehicles (EVs) is slowing compared to previous years, reaching 7.8%, down from 7.9% last year and 7.1% the year prior. Meanwhile, hybrids increased to 13.6% of new retail registrations through Q1 2025, from 11.3% through Q1 2024 and 8.8% through Q1 2023. Some of the uptick in hybrids may be attributed to consumers’ concerns with EV charging infrastructure and range anxiety. Hybrids are known to offer practical middle grounds—with the convenience of refueling and not having to plan longer trips around charging availability, this fuel type is becoming a more ideal choice for some. Vehicle preferences continue to vary by age group Through Q1 2025, Gen Z accounted for 14.8% of new retail hybrid registrations and 8.4% of EV registrations, while Millennials made up 15.9% for hybrid and 11.4% for EVs. On the other hand, Baby Boomers were at 16.3% for hybrids and 5.9% for EVs this quarter. Younger generations have naturally gravitated towards the gas-alternative fuel types as it aligns with their current lifestyle, including everyday commuting and the tech-forward features that these vehicles offer. As the automotive industry continues to evolve, staying attuned to the shifting landscape is essential. We’re committed to delivering insights that will help professionals make forward-looking decisions and stay ahead of the curve. To learn more about vehicle market trends, view the full Automotive Market Trends Report: Q1 2025 presentation on demand.