Ford tapped the brakes on EVs and bet on hybrids. It's paying off.

Ford announced in its earnings on Wednesday that hybrid sales rose 36% in the first quarter of 2024.

• Ford is reaping the benefits of its bet on hybrids. 
• The automaker recorded surging hybrid sales in the last quarter, even as demand for EVs slowed.
• Ford slowed its EV push, postponing investment into manufacturing facilities and delaying new models. 

Ford's bet on hybrids looks like it's paying off.

The Detroit automaker announced in its earnings on Wednesday that hybrid sales rose 36% in the first quarter of 2024, with CEO Jim Farley telling investors that the company is now the third largest seller of hybrids in the US behind Toyota and Honda.

By comparison, the company's pure EV business has struggled.

Losses at Ford Model e, the company's dedicated electric vehicle unit, grew to $1.3 billion in the first three months of 2024 as demand for electric vehicles slowed and manufacturers engaged in a brutal price war.

"We made a lot of capacity decisions several years ago on hybrids, and I'm very thankful we did," said Farley in the company's Q1 earnings call.

Unlike rivals such as General Motors and Volkswagen, Ford continued to invest in its hybrid lineup even as it built up its EV business over the past few years — and now that EV demand is slowing partly because of the lack of affordable models, it looks like that strategy is paying off.

Hybrids, once dismissed by EV enthusiasts like Elon Musk as a "phase," are experiencing a boom in popularity as US customers seek cheaper options.

Data from online autos marketplace Edmunds reported by The New York Times found that, on average, buyers were paying $42,500 for hybrids in November 2023 compared with $60,500 for electric vehicles.

Toyota, which has been famously wary of the EV transition, has reported surging sales of its majority-hybrid US lineup, with the Japanese carmaker's hybrid and EV sales growing by 84% in February.

Ford's crosstown rival General Motors, meanwhile, has reversed its "all-in" electric vehicle strategy and pledged to bring back hybrids into its North American vehicle lineup.

Not to be outdone, Ford is also doubling down on hybrids, even as it cuts back on some EV investments.

The company announced earlier this month that it would delay the release of its new electric SUV from 2025 to 2027 and instead focus on expanding its hybrid lineup in North America by the end of the decade.

Ford vice president Jim Baumbick previously told Business Insider that hybrids would continue to play a role in the company's strategy for "an extended time," saying Ford's mixed approach gave customers "freedom of choice."

One company that is not thrilled about the hybrid renaissance is Tesla.

In its most recent earnings presentation, the Elon Musk-run EV giant, which famously shuns hybrids, blamed the enthusiasm for partially battery-powered cars for depressing global sales of pure EVs.

"The EV adoption rate globally is under pressure, and a lot of other auto manufacturers are pulling back on EVs and pursuing plug-in hybrids instead," said Musk in the company's earnings call.

"We believe this is not the right strategy, and electric vehicles will ultimately dominate the market," he added.

Ford did not immediately respond to a request for comment made outside normal working hours.