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During the transition between technological regimes, incumbents often face a strategic choice: to enter the new market with products designed from scratch based entirely on the new technology or to transition into the new market by keeping links with the old technology via hybrid products. Hybrid products have not been extensively studied and the scant literature to date has focused on their relationship with innovation and technical performance metrics. This existing work does not provide a clear indication of what is the relationship between investments in hybrid products and performance in the market based on the new technology. To address this gap, we adopt a question-based abductive approach to explore this relationship and further identify which other factors can affect the results. Our context is the US automobile industry between 2009 and 2024, a period when the auto industry began its transition from internal combustion engines to electric vehicles. We find that incumbents that invest in hybrid vehicles during the transition are associated with inferior market performance in the market for electric vehicles. We also find that the degree of hybridization and the type of target market moderates the magnitude of this hybrid penalty. Our findings suggest that following a hybrid product strategy entails important limitations that firms need to carefully consider during technological transitions.