There are a lot of factors, but the short answer is that due to overall ICE efficiency improvements, vehicle weight reductions, etc., automakers have kind of painted themselves in a corner where their standard hybrid models aren’t really a big enough improvement from the gas burners to justify the higher price tag. Its an outdated and overpriced technology at this point.
Since you mentioned it, take the Toyota Highlander for example. To jump up to the HV from the standard 4-cylinder, you’re going from 21 city / 29 highway to 36 city / 35 highway. Sounds great, but you’re paying $4,000 more at the dealership. Lets assume an average gas price of $3/gallon going forward into the near future. Its probably going to hover in that range, but overall its not super important how accurate that number is. If you drive 100% city, the payback starts at about 70,000 miles (4~5 years for most people), and thats not including the much bigger resale value depreciation you have with the hybrid after the warranty period, due to battery concerns. If you drive 100% highway, the payback period is closer to 226,000 miles (12-14 years). Split the difference, and most drivers are looking at 8 or 9 years of ownership before they could justify the higher purchase price. Find another vehicle where its only like $2k more for the hybrid? Still a 4-5 year payback period for most drivers. Simply untenable.
What has happened is regular hybrids now only make economic sense if you do a ton of city driving in a location with super high gas prices (like California). And EV’s and, to a lesser extent, plug-in hybrids simply make way more sense for those markets. Standard hybrids are at a price point and efficiency point that puts them in no man’s land.
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