China and Europe are unwittingly teaming up to push PHEV plug-in hybrids instead of electric cars

From Ford to Mercedes and Hyundai, many manufacturers are rediscovering the hybrid cars in the face of a slowdown, if not a decline, in sales of electric cars. The move may seem a bit strange, given that in the first six months of 2024, 4.59 million electric cars were sold worldwide, of which 2.5 million were in China.

With a background of increasingly harsh tariffs on Chinese cars, would they be Europe and the United States missing the electric car train by focusing on hybrids? Why this interest in reviving a technology that seemed doomed? To a large extent, because of the European Union and China.

In the absence of electric cars, PHEVs serve to comply with emissions standards

With the horizon of 2030 and 2035, depending on the regions of the world, for the ban on sales of gasoline carsno brand can afford to stop investing in and developing electric cars. Its survival is at stake. Even so, many brands have calmed their enthusiasm for electric cars, while almost all are developing hybrid cars again.

And slowing electric car sales are not the only reason for this renewed interest. In the United States and Europe, future sales targets are emissions of The CO₂ emissions from the car fleet are forcing them to seek greater electrification of cars if they cannot sell all the electric cars they need to meet the maximum average emissions.

In Europe, from 2025 to 2029, average CO₂ emissions must be 93.6 g/km. This does not seem like a big deal, as the current maximum average is 95 g/km, although in reality it is more, as it is weighted against the average weight of cars sold, mainly heavy SUVs. In other words, 1.4 g/km less will not lead to a technical revolution that would lead to a change in consumer consumption habits.

Instead of selling more electric cars, which would help reduce emissions, manufacturers will simply offer more and more hybrid cars and increasingly smaller engines for petrol models.

The real change will come in 2030where the average CO₂ emissions of cars sold by a manufacturer must be at most 49,5 g/km. It is equivalent roughly speaking at an average consumption of 2.14 l/100 km of petrol and 1.87 l/100 km for diesel. Without a strong electrification of cars, this is impossible to achieve. And that is where PHEVs and extended-range electric vehicles come into play, where the gasoline engine only acts as a generator and does not move the car.

In the US, the proposed average emissions for 2030 are similar to those in Europe, although slightly higher: 82 g/mile, approximately 50.9 g/km, or 2.2 l/100 km.

China is also pulling the PHEV bandwagon, but with more sense than Europe

Neta S, one of the new Chinese PHEVs developed as extended-range electric cars and not as a gasoline car to which a battery and a small electric motor are added.

In Chinaplug-in hybrid cars are part of the same category as electric cars, they are the New Energy Vehicles (NEV). They enjoy the same state incentives as electric cars. Thus, the market share of PHEV cars has increased by 8 percentage points in 2023 to reach 41% in 2024. Yes, four out of 10 cars sold in China are PHEVs.

It is the fastest growing segment compared to the electric segment and no brand, whether Chinese or foreign, wants to miss out. BYD is the undisputed leader of the segment, but other brands such as Zeekr or Smart (both from the Geely group), are considering leaving behind their mantra of “only electric cars” to include PHEV models or variants in their ranges.

The boom in plug-in hybrids in China is also due to their technology. Ironically, this is a PHEV technology launched by General Motors in 2008 and abandoned by the American group shortly after.

In Europe and the US, PHEV models are essentially a petrol car with a small battery and electric motor added as needed. Once the battery power is depleted, it is the petrol engine that has to power the car and all the extra weight. They also only accept slow charges so there is little incentive to recharge the battery.

These are models developed as a tool to improve the average emissions of the brand’s fleet thanks to a completely unrealistic approved consumption and sold at a much higher price than a simple hybrid. In addition, most of them comply on paper with the minimum electric autonomy required in Europe: 40 km.

And even though they are more efficient than a simple petrol car, they end up emitting up to three times more than what is approved in real use. These are models that are mostly disconnected from the reality of the market and the plugs. In other words, they do not compensate either financially or ecologically.

However, the latest PHEV models can also be charged quickly, something that held back some of the early plug-in hybrids. Electric range has also increased considerably, often exceeding 100 km in recent years. The average range of PHEVs rose from 50 kilometres in 2019 to almost 80 kilometres in 2023, according to data from BloombergNEFand this year it will be higher again.

But there are also many Chinese brands that have adopted the concept that GM tried to popularize with the Opel Ampera/Chevrolet Volt: an extended-range electric car. In these models, the electric motor is what moves the car, the gasoline engine is relegated to the function of a simple generator. That this is the case and not the other way around is very important. Electric motor converts 85% of the energy it consumes into movementwhile in a gasoline engine this proportion is less than 40%.

These PHEVs are essentially electric cars, with an average electric range of 127 km, fast charging and a range extender (a petrol engine). In short, they are cars designed for people and not just to comply with a regulation by taking advantage of a design flaw in the regulation in question.

Finally, the price of these new-generation PHEVs also explains the revival of this type of propulsion. China, the average price of PHEVs has not stopped falling in the last five years, going from being the most expensive option to being totally Competitive with gasoline and electric models“By comparison, they are now the most expensive option in the US, costing around $20,000 more than models available in China,” Bloomberg NEF notes.

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