No More Hybrids? GM, Volkswagen Exit Hybrid Vehicle Business

General Motors (GM) and Volkswagen (VOW3.DE) have departed the hybrid vehicle business as they look to extend their investments into the all-electric car market. The news comes as the two companies shift their focus and investment into EVs, which will account for $225 billion in spending by all automakers through 2023, Alix Partners estimated.

General Motors and Volkswagen have said there is no future in the U.S. for hybrids despite their ability to help the companies meet emissions and fuel mileage requirements, especially in China and Europe, The Wall Street Journal reported.

For GM, the move will allow it to focus on its plan to launch as many as 20 electric vehicles globally over the next four years, while Volkswagen has dedicated billions to electric vehicle development and production.

GM has seen its hybrid SUV sales falter, eventually discontinuing the models. The company’s Chevy Volt hybrid saw some success but was deemed too expensive, and GM ended production this year as well as the production of its hybrid Cadillac CT6 sedan.

“If I had a dollar more to invest, would I spend it on a hybrid? Or would I spend it on the answer that we all know is going to happen, and get there faster and better than anybody else?” GM President Mark Reuss said in an interview with the news outlet.

GM and Volkswagen are looking toward the future with their electric vehicle delivery as China is a growing market for the automakers that need to comply with a specific number of zero-emissions vehicles to avoid monetary penalties.

VW also wants to use China as a way to scale and keep costs down in the U.S. as it looks to go to market faster with EVs in the states, the news outlet reported.

“Our strong preference is to go all-in where the market is heading, as opposed to hybrids as a way to hedge our bets,” Scott Keogh, VW’s U.S. chief told The Wall Street Journal.

Shares of General Motors stock were down 1.35 percent as of 11:08 a.m. ET on Monday while shares of Volkswagen stock were up 0.11 percent at the same time.