EVs vs. hybrids: What to know before heading to dealerships

As climate-conscious shoppers enter auto dealerships, they are faced with a choice: EV or hybrid. Yahoo Finance reporter Pras Subramanian joins Wealth! to discuss what consumers should consider when deciding which vehicle to purchase.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This article was written by Gabriel Roy.

Video Transcript

BRAD SMITH: Many moons ago, when you went to buy a car, you had your choice of brands, but you could only really get one kind of car, gas powered. Now, the more climate-conscious shoppers get to other options. You get electric vehicles and you get the option of a hybrid. So if you have a budget for a new car and don't know what to choose, don't worry. Yahoo Finance's very own senior autos reporter Pras Subramanian is here to help. So Pras, what should we be considering when we're choosing between an EV and a hybrid?

PRAS SUBRAMANIAN: Yeah. There's a lot to consider there between these two different types of cars. Recently, we've seen EV kind of ownership and interest kind of come down, whereas hybrids has sort of exploded in terms of interest and sales. So let's take a look at what you really need to look at when you're trying to actually consider.

So with EVs, looking at prices and Americans talking about how fewer Americans are interested in EVs compared to a year ago. Prices have been going up. So cost is a big consideration versus hybrids. Hybrid prices are like on 42.5 versus an EV, 55-ish. So that's a big concern there. But then also maintenance, right? Maintenance is cheaper for an EV, but more for a traditional gas car or hybrid, so they're looking at that.

But then also, of course, there's the insurance thing. A big, big, big thing we talked about this week is insurance. And EVs generally have higher insurance costs because they're a bit more complicated to repair. But we're hearing some insurers like Progressive talk about how as they get more data into that, they can actually bring those costs down.

Real quick, also the kinds of trips that you do. If you're the kind of person that's going to be taking a lot of shorter trips for errands and maybe going to work-- the average American drives 37 miles a day, right? If that's your use case, I would say an EV is the best use case for that. If you can charge but you can charge at home at night or at the work site or even in your neighborhood, that's a great option for these shorter trips.

If you're like a person in sales and you're driving a lot, 100 miles, 200 miles a day, probably a hybrid a better option for you. So I think that's sort of like the use cases and how much you can afford. Really going to weigh in on what you get. And this is like not brain surgery. But at the same time, there's a lot more options out there for you.

BRAD SMITH: This is the second time this week that we've heard telematics come up in the case for EVs, especially as bringing down some of those auto premiums. And we can come back to that or discuss it at length at another day. But let's get people the nitty-gritty here and the goods. I heard you had some specific picks for our buyers out there. So what are they?

PRAS SUBRAMANIAN: We got some picks here. So for instance, in the EV world, at the higher end, in my opinion, if you've got the money and you wanted the nicest ride you can get, I think you can go Lucid Air if you want that sedan, really high performer out there. Or if you want a more of an adventure vehicle, a pickup, I think the Rivian still the top pick in that space. And those Cybertruck's out there. So there's the F-150 Lightning, great truck, but the Rivian is my top choice.

And then for the affordable thing, you still cannot beat the Tesla Model Y only because you can have for so cheap, great feature set. Obviously, the Tesla Supercharger network is the most ubiquitous, the best one. And it's basically an appliance, right? It's a car. It's not really your BMW, but it's a car that gets you around town, and it looks OK.

BRAD SMITH: Yeah. All right. Pras, thanks so much for breaking this down.

PRAS SUBRAMANIAN: The hybrids, though. Hybrids real quick.

BRAD SMITH: Hybrids, yes, the best hybrids. We need to know that. Yeah.

PRAS SUBRAMANIAN: So real quick, the top plug-in hybrid in my opinion is the BMW X50-E. That car is rated Consumer Reports top overall vehicle. No matter what it was, it's their top vehicle. And affordable the Toyota Prius King. That thing has been around for 20 years. The new model looks better, has better range, more power. I think you can't lose with that car.

BRAD SMITH: I rented the BMW X5 once. That thing flies--

PRAS SUBRAMANIAN: Yeah.

BRAD SMITH: --dangerously. Pras, thanks so much here for breaking these down for us. People out there, they got the picks that they need to know at this point.