EV Sales Outstrip PHEVs, Report Highlights

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EV Sales Outstrip PHEVs, Report Highlights

Observations suggest a slowdown in the growth of electric vehicle (EV) sales, leading some to speculate that EV adoption might be plateauing, with plug-in hybrids (PHEVs) presented as the potential next big thing. However, recent findings by Bloomberg NEF paint a more nuanced picture of the dynamics between PHEVs, EVs, and the overall market demand.

According to Bloomberg NEF’s EV analyst Corey Cantor, while PHEVs have indeed seen significant growth, with sales surging by 48% from 2022 to 2023, this increase hasn’t outpaced that of battery-electric vehicles (BEVs). BEVs experienced a 51% jump in sales during the same period, starting from a substantially larger base. In the U.S. alone, sales of fully electric vehicles surpassed 1.1 million units, dwarfing the 281,000 PHEVs sold.

A notable detail from the report is that nearly half (46%) of all PHEV sales can be attributed to Stellantis group products, with popular models like the Jeep Wrangler 4xe and Chrysler Pacifica Hybrid leading the charge. Toyota and Lexus rank second, claiming 15% of the PHEV market share. Although brands like Kia, Hyundai, and Volvo (owned by Geely) have a presence in the PHEV market, their sales figures for fully electric vehicles significantly exceed those of their hybrid counterparts. This data underscores the complex interplay between different types of electrified vehicles and the broader trends shaping consumer preferences and market dynamics.

The question of whether plug-in hybrids (PHEVs) are viable in the broader context of electric vehicle (EV) adoption remains open. PHEVs are often marketed as an answer to potential EV buyers who worry about range. However, it’s not always clear if PHEVs fully address these concerns or if they represent a sound economic choice. A notable point from Bloomberg BNEF’s research is the significant cost difference in battery prices: PHEV batteries cost nearly three times more per kWh than those for EVs, at $343/kWh compared to $128/kWh for EVs in 2023. Although the $7,500 IRA tax credit offers some cost relief, vehicles like the Toyota Prius Prime and RAV4 Prime, manufactured in Japan, do not qualify for this incentive. Given that PHEVs constitute less than 2% of Toyota’s sales, a major shift in the company’s manufacturing strategy seems unlikely just to boost PHEV sales.

Moreover, the current state of PHEV technology appears less advanced than that of both BEVs and traditional hybrids. For example, the Jeep Wrangler 4xe has limited EV mode range and performs less efficiently outside of it. The introduction of more sophisticated PHEVs, offering greater electric range and at attractive price points, alongside better consumer education on their use, could potentially increase their market penetration.

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