While plug-in hybrids are experiencing a sales resurgence, it is unlikely that they will surpass electric vehicles in the long term, according to Bloomberg New Energy Finance. Sales of plug-in hybrids have been on the rise in recent years, particularly in China, leading BNEF to predict a peak market share of 10% by 2030. However, as battery prices continue to drop and electric vehicles become more affordable, the popularity of plug-in hybrids is expected to decline.
The Rise of Plug-In Hybrids
In the United States, plug-in hybrid sales reached a record high in 2023, with over 250,000 vehicles sold representing about 20% of total plug-in vehicle sales. Despite this growth, plug-in hybrids only accounted for less than 2% of overall new car sales. With many plug-in hybrids losing the federal EV tax credit and facing less favorable pricing compared to hybrids, the sustainability of this growth trend is uncertain.
Response from Automakers
General Motors and Toyota are among the automakers responding to the softening EV sales by reintroducing plug-in hybrids to their lineups. General Motors plans to reintroduce plug-in hybrids after discarding the technology used in the Chevrolet Volt. Toyota, on the other hand, aims to increase the electric range of its plug-in hybrids to align with stricter California emissions standards.
The Price Factor
BNEF reports that plug-in hybrids are currently the most expensive powertrain option in the United States. However, in China, prices have fallen below those of conventional internal-combustion cars over the past five years. This price decline has been accompanied by improvements in electric range and charging speed, making Chinese plug-in hybrids more practical as electric vehicles.
Driving Behavior and Emissions Efficiency
Despite the advancements in plug-in hybrid technology, BNEF questions whether these vehicles are actually being driven in electric mode. Studies have shown varying percentages of kilometers driven in electric mode, ranging from 26% to 54%. Issues such as the frequency of charging and the actual environmental impact of plug-in hybrids have raised concerns that regulators need to address.
In conclusion, while plug-in hybrids are currently experiencing a resurgence in sales, their long-term market share is expected to peak at 10% before declining. As battery prices drop and electric vehicles become more affordable, the popularity of plug-in hybrids is likely to decrease. Automakers and regulators will need to address issues related to pricing, driving behavior, and emissions efficiency to ensure the sustainable growth of plug-in hybrids in the future.