Bob Lutz, a legendary auto executive who held senior positions at GM, Ford, Chrysler, and BMW, was known for his outspoken and contrarian views. In his 2011 book Car Guys vs. Bean Counters: The Battle for the Soul of American Business, he argued that U.S. automakers would benefit from a gradual but steep rise in gas prices. That position was sheer blasphemy in Detroit, but growing indications are that Lutz has been vindicated.
Lutz maintained that if U.S. prices approximated those in Europe and elsewhere overseas, Americans would more readily embrace cleaner technologies like hybrids and electric vehicles if they were driven by price rather than forced by government mandates. Lutz was alarmed by the progress foreign automakers were making in improving the fuel efficiency of their vehicles, which he attributed to significantly higher gas prices in the markets in which they operated.
Lutz was particularly resentful about the green energy halo that Toyota enjoyed because of its hybrid Prius, which he said created a public and media perception that its vehicles were all more fuel efficient than GM’s. In Lutz’s day they weren’t, but they are today, considerably so.
Lutz, when he was in his seventies, against all odds championed and oversaw the development of GM’s plug-in hybrid Chevy Volt, which utilized a pioneering technology that allowed the Volt to function as a pure electric vehicle for 40 miles on a single charge and then revert to gas engine technology. The Volt, introduced in 2010, instantly became a cultural phenomenon, with a neurologist named Lyle Dennis becoming a minor national celebrity because of his passionate raves about the vehicle. More than 90 percent of Volt owners repeatedly said they would buy another one, according to Consumer Reports.
Lutz’s sweet spot in 2011 was $6 a gallon. Ironically, prices in parts of Los Angeles have recently touched that level. Adjusted for inflation, Lutz’s target would be closer to $8.81 today—well above current prices, even in California where gas prices have long been significantly higher.
Lutz’s broader point still stands: consumers respond to price. California shows it most clearly, but the shift is now playing out across the country.
One in five vehicles sold in America are now hybrids. What’s surprising is that hybrids have overtaken electric vehicles even in California, whose residents dominated the adoption of EVs and still account for roughly 30% of new U.S. EV sales.
According to first quarter new car registration figures released by the California New Car Dealers Association (CNCDA), based on Experian Automotive registrations, California’s EV registrations fell to 13.7 percent of new car sales in the first quarter, down from 21.0 percent for full-year 2025 and well below the 22.0 percent peak in 2024—the lowest share since the fourth quarter of 2021.
The pullback, according to the CNCDA, reflects a combination of factors, including the phase-out of federal BEV tax credits, sustained affordability pressures, and broader market softening. With President Trump having eliminated the $7,500 subsidies on most new electric vehicle purchases, EVs have quickly lost momentum, with buyers shifting back toward gas engines and hybrids.
Gas-powered vehicles accounted for 61% of the Golden State’s new vehicle registrations, up from 54%. California’s mandate called for advanced green vehicles to account for 35% of new sales in 2026. Congress blocked California’s ability to set its own green energy rules.
The silver lining for environmentalists is that hybrids also soared in the first quarter, accounting for 20.9 percent of California’s new car market—effectively matching the share EVs held at their 2025 peak.
Lutz, of course, wasn’t the only executive to champion hybrids as a bridge to electrification. Former Toyota CEO Akio Toyoda made the same argument more than a decade later but was forced to step aside in 2023 after resisting pressure to accelerate the company’s EV transition.
Fortunately for Toyota, Toyoda remained in control of the Japan-based company, which stayed committed to its hybrids-first strategy. Nearly 50% of Toyota’s vehicle sales are hybrids, and some of its most popular models are now exclusively available with that powertrain.
Toyota’s first-quarter success in California—America’s largest car market and the fifth-largest economy in the world—would likely stick in Bob Lutz’s craw. In his book, Lutz argued that Toyota’s supposed automotive genius was overrated and the company’s management was over-worshipped.
Toyota’s share of the California new car market rose to 19% from 17.8%, despite a shortage of its RAV4 hybrid, one of its most popular vehicles. Of the top 25 electrified vehicles sold in California, Toyota and its luxury Lexus brand accounted for six of the top ten positions and 11 of the top 25.
Adding insult to injury, not one of GM’s electric vehicles made the top 25 list. Ford had two: its electric Mustang Mach-E and its hybrid Maverick pickup, both of which are manufactured in Mexico. Notably, Ford catapulted Tesla and now ranks as the third best selling brand in California, albeit with less than half of Toyota’s market share.
Toyota still has another shoe to drop on the EV front.
While GM and Ford have retrenched from their EV ambitions, Toyota continues a measured transition that for years was widely criticized in the U.S. media. The automaker this year will introduce three new electric vehicles: the revamped bZ, the rugged bZ Woodland, and the affordable C-HR EV—all while its hybrid sales hit record highs.
A three-row electric SUV is slated for production later this year at its plant in Princeton, Indiana, where the company is also expanding production of its popular Highlander. Toyota recently announced an $800 million investment to prepare its Georgetown, Kentucky plant for its second U.S.-built EV and to ramp up production of Camry and RAV4 hybrids.
South Korea-based Hyundai is emerging as a formidable competitor on both the EV and hybrid fronts.
At the heart of this expansion is the Hyundai Motor Group Metaplant America in Ellabell, Georgia. This $7.6 billion flexible facility is already producing the IONIQ 5 and has recently added the three-row IONIQ 9. By the end of 2026, it will also produce hybrid variants, allowing Hyundai to build across powertrains rather than bet on a single outcome.
In the first quarter, the IONIQ 5 overtook the Chevrolet Equinox EV in U.S. sales, moving 9,790 units compared to the Equinox’s 9,589. While the margin was narrow, the symbolism is hard to miss: a foreign automaker is outselling the vehicle GM positioned as its mass-market EV leader.
That the IONIQ 5 is built in the U.S. while the Equinox EV is built in Mexico only compounds GM’s embarrassment.
In California, the IONIQ 5 was the leading non-Tesla EV model. Combined with Kia, Hyundai Motor Group claimed five of the top 25 positions for electrified vehicle registrations, underscoring the widening gap between the market’s leaders and laggards.
So what happened to Lutz’s Chevy Volt?
GM CEO Mary Barra halted production in 2019, opting to focus on her all-electric “zero-emissions” strategy. The Volt was still losing money at the time, but GM has since written off more than $8 billion tied to Barra’s so far failing EV strategy.
CNBC was mistaken saying the Volt taught GM a lot about electric cars. GM began manufacturing the EV1 in 1996, an electric vehicle that also had a beloved following. Lutz said in Car Guys that some members of the EV1 team were involved developing the Volt’s battery, which was manufactured in Michigan. The car was assembled at the Detroit/Hamtramck plant, where GM now builds several of its electric trucks and SUVs that are selling so poorly the automaker recently closed the factory for a month to adjust for market conditions.
Although the Chevy Volt was discontinued seven years ago, it remains a common sight in my West Los Angeles neighborhood—more so than most other GM vehicles, which don’t show up in California’s top-selling ranks. Every Volt owner I’ve spoken with raves about the vehicle.
Lutz railed for years about bean counters running the auto industry. He didn’t expect the Volt would be profitable, at least initially, but argued that GM needed a halo vehicle to challenge the perception it was an environmentally unfriendly company building only gas-guzzling trucks and SUVs.
GM still relies on those vehicles for the bulk of its profits, and its fleet now ranks among the least fuel-efficient in the industry. It could again benefit from a popular green halo.
Barra killed the Volt. The market is now moving in the direction Lutz anticipated decades ago.
I’ll be writing more about Lutz’s Car Guys book in an upcoming blog, easily among the best and most inspiring books on leadership I’ve ever read.