Plugin hybrids (PHEVs) are seeing renewed consumer interest and making a comeback in the global electric vehicle marketplace. Several factors contributing to this shift include:
- Flexibility and Range: PHEVs combine the benefits of electric propulsion with a gasoline engine. This dual-power capability allows drivers to use electric power for shorter commutes and switch to gasoline for longer trips, offering more flexibility and eliminating range anxiety common with pure electric vehicles (EVs).
- Infrastructure Readiness: In many regions, the charging infrastructure for fully electric vehicles is still developing. PHEVs offer a solution by reducing dependency on charging stations, as they can rely on gasoline when needed. This makes them a more practical choice, especially in areas where charging infrastructure is limited.
- Transition Technology: PHEVs serve as a transitional technology for consumers who are hesitant to fully commit to electric vehicles. They provide a steppingstone towards EV adoption by allowing drivers to experience electric driving while still having the backup of a conventional engine.
- Government Incentives: Some countries and regions provide incentives and subsidies for PHEVs as part of their efforts to promote cleaner transportation. These incentives can make PHEVs more financially attractive compared to conventional vehicles, driving their popularity.
- Improved Battery Technology: Advances in battery technology have enhanced the efficiency and range of PHEVs. Newer models can offer longer electric-only ranges, making them more appealing to consumers looking to reduce their carbon footprint without compromising on convenience.
- Market Demand: There is a growing consumer demand for vehicles that offer lower emissions without sacrificing range or performance. PHEVs cater to this demand by providing a balance between electric driving and traditional internal combustion engine capabilities.
Overall, the resurgence of PHEVs in the global marketplace reflects a blend of consumer preference, technological advancements, and supportive regulatory environments aiming to reduce emissions and promote sustainable transportation solutions.
Global automakers are also helping drive the shift back toward PHEVs for several reasons. A major factor is the current regulatory environment, with PHEVs qualifying for many of the same incentives that are in place for battery only electric vehicles (BEVs).
Automakers are finding that many customers who balk at buying a BEV because of range anxiety or fear of finding a charging station are more willing to consider buying a PHEV. They get the benefits of fuel savings on short local trips along with peace of mind for fueling up on longer trips. For these customers, the combination of environmental benefits and carefree driving makes PHEVs a more attractive choice.
As car makers respond to these consumer trends, the number of different PHEV models on sale in the U.S. has nearly doubled since 2019, to 47, according to Edmunds automotive analysts.
According to recent market research from Statista, “Revenue in the Plug-in Hybrid Electric Vehicles market in the United States is projected to reach US$18.8 billion in 2024”.
The Statista report further indicates that:
- The US PHEV market is expected to show an annual growth rate of 4.57% CAGR over the next five years and is expected to reach 359.80k vehicles in 2029.
- The volume weighted average price of Plug-in Hybrid Electric Vehicles market in the United States in 2024 is expected to be US$65.3k per vehicle.
While the United States is experiencing a recent surge in demand for Plug-in Hybrid Electric Vehicles, driven by a growing awareness of environmental sustainability and government incentives, from an international perspective, China continues to hold a significant lead in the number of PHEVs and percentage of market share. According to J.D. Power, “PHEVs accounted for 14% of registrations in China, growing from 10% across the comparable period of last year.”
Summary
According to Forbes, “PHEV sales are gaining momentum because electric vehicle growth has paused, probably temporarily, as the next round of electromobility awaits vehicle choices that provide big value appeal for average earners.”
As many analysts are now recalibrating their projections for near term sales growth of full BEVs, automakers are looking for improved agility to fill the resurging demand for PHEVs as an alternative. At the same time, they need to keep a strategic eye on long-term larger market opportunities as BEV range and price reductions reignite that market segment.
In this shifting environment, automotive manufacturers need to rely on vendor partnerships that can span the full range of powertrain electrification solutions for PHEVs, while also supporting the coming shift back toward BEVs.
ENNOVI is proud to continue building on over 60 years of serving the automotive industry by designing and delivering targeted solutions for PHEVs alongside our sustained commitment to supporting the ongoing evolution of BEVs and the EV market in general.
Watch for an upcoming article with more details on ENNOVI’s specific powertrain and battery solutions for PHEVs and beyond.
