How Does Hybrid Depreciation Compare To ICE-Powered Cars In 2025

More new vehicle consumers are starting to recognize hybrid vehicles as a better alternative compared to ICE and fully electric products. ICEs remain the more popular option, but this gap has been steadily closing, with 2025 looking to

reflect the biggest transition in sales
. More manufacturers are starting to identify gasoline-electric hybridization to be the better drivetrain option to focus on, as fully electric technology remains a steep hill to climb. Despite noteworthy developments and expansive investments, EVs remain substantially more expensive and struggle with compromised practicality due to limited charging speeds and public infrastructure. Battery replacement costs also remain far too steep.

Thankfully, some of these EV developments have filtered down into the new generation of HEVs, which is why it really is the more

sensible option for you to consider in 2025
. If you’re looking for long-term ownership experience, you’ll naturally be concerned about how well these models retain their value, as this has not been the best investment to consider in previous years. Of course, HEV market reception and subsequent performances have altered, resulting in them holding value a lot better when compared to previous-generation examples. The big question is just how well they perform in the used market when compared to their ICE alternatives.

New Hybrid vs. ICE Depreciation Rates

For the sake of keeping this topic easy-to-understand and relatable, we will be using the

base Toyota Corolla LE
sedan and its hybrid counterpart as an example. Based on the Edmunds True Cost To Own calculator, we see that the difference in depreciation between an ICE and Hybrid 2025 Toyota Corolla LE is pretty much negligible.

The calculator shows us that the 2025 Corolla Hybrid LE loses $11,115 of its value after five years, while the ICE model loses $10,238. These models cost $23,825 and $22,325, respectively, directly from Toyota. Your total expenditures for each model, including the aforementioned depreciation, only reflect a $1,351 difference over five years, in favor of the hybrid thanks to its substantially lower fuel costs.

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Used Hybrid vs. ICE Depreciation Rates

When we look at the

depreciation rates of a five-year-old Corolla
, which is mechanically identical to the model on sale today, we see that the depreciation rates are pretty much on par with the new model. The Edmunds True Cost To Own shows us that the Hybrid loses $9,535 of its value over five years, while the ICE loses $8,368.

According to Consumer Reports, a 2020 Toyota Corolla Hybrid LE currently sells for $14,975. When new, it would have set you back by $24,095. A five-year-old ICE Corolla LE is now worth the same as the Hybrid version, but this model only costs $20,050 when new.

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Why Hybrids Depreciate Faster Than ICEs

Hybrids depreciate faster than internal combustion engine vehicles in the U.S. due to several factors, including battery degradation concerns, high repair costs, and shifting consumer preferences. Unlike ICE vehicles, hybrids rely on

expensive battery packs
that lose efficiency over time, making used hybrid buyers wary of costly replacements. Additionally, hybrid repair costs are often higher because they require specialized technicians and proprietary parts, discouraging long-term ownership. Until recently, hybrids lacked widespread demand in the used car market, which led to steeper depreciation. However, the gap in depreciation between hybrids and ICE vehicles has narrowed over the past five years due to increasing fuel efficiency awareness, rising gas prices, and improved hybrid technology.

Consumers now recognize hybrids as a cost-effective alternative to traditional gas-powered cars, boosting their resale value. Automakers have also improved

battery longevity and warranty coverage
, addressing reliability concerns. The growth of the EV market has further helped hybrids retain value, as buyers see them as a transition between ICE and full-electric vehicles. More automakers producing hybrid versions of popular models, such as SUVs and trucks, have also increased hybrid acceptance in the used car market. Previously, hybrids appealed mainly to economy car buyers, but broader availability has improved resale demand. Supply chain disruptions and higher new car prices have further contributed to stronger used hybrid values, as buyers look for fuel-efficient alternatives without the high cost of EVs. While hybrids still depreciate faster than ICEs, the difference is smaller than it was five years ago, making them a more attractive choice for resale-conscious buyers.

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How Much More Efficient Modern Hybrids Are

If you’re looking for outright value retention, it makes sense to want to consider an ICE model over its hybrid counterpart. Realistically, the Corolla Hybrid is going to be one of the best-performing models when it comes to value retention. However, you also need to consider what you will lose in value, you gain in overall fuel savings.

2025 Toyota Corolla Hybrid vs. ICE EPA Fuel Consumption Estimates

According to the EPA, the base front-wheel-drive Toyota Corolla Hybrid consumes 50/43/49 MPG on the city/highway/combined cycle and

covers 531 miles
on a full 11.3-gallon tank. This equates to a $1,000 annual fuel bill, which translates to $3,250 worth of fuel savings over five years. This model will also cost $1.63 to drive 25 miles and $35 to fill the tank.

If you upgrade to the all-wheel-drive model, you still get to benefit from impressive fuel savings. This model consumes 41/47/44 MPG, while covering 497 miles on a single tank. It will cost you $1,050 to refuel every year, $1.74 to drive 25 miles, and save you up to $3,000 over.

Opting for the ICE models translates to somewhat increased fuel costs, which should not come as a surprise. Toyota only sells the ICE model with the front-wheel-drive system. The most efficient LE returns 32/41/35 MPG while covering 462 miles from its 11.2-gallon tank. It will save you $1,750 in fuel costs over five years and cost you $1,350 to refuel every year. You can also expect to spend $2.19 to drive 25 miles.

The new FX Edition is one of the thirstier options due to its larger wheel option. This model brings in a 31/39/34 MPG consumption result and covers 449 miles on a single tank. This will save you $1,500 in fuel costs over five years and cost you $1,350 to refuel annually, which translates to $2.26 to drive 25 miles.