Despite these efforts, EV sales are expected to slow in 2024. A report by Canalys estimates that the growth rate in the global electric-vehicle market will decline to 27.1 percent this year. One of the major reasons cited for this slowdown is the reduction in state subsidies, which has made EVs less financially attractive to potential buyers. In contrast, in 2023, government incentives played a significant role in EV adoption, resulting in a projected growth rate of 29 percent with sales of 13.7 million units.
As the growth of all-electric vehicles is falling short of expectations, major automakers are adjusting their strategies to meet their customers halfway. There is a growing trend to reconsider the feasibility of hybrid cars to meet consumer demand and avoid costly penalties related to federal fuel economy and emissions standards.
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This change in strategy is somewhat in contrast to the industry’s recent focus on promoting all-electric vehicles. Despite billions of dollars invested in EV technology, many automakers are recognizing the potential of hybrid vehicles to reduce fuel consumption and emissions in the short term, as well as serve as a step toward full vehicle electrification. are doing.
Hybrid vehicles, which combine traditional internal combustion engines with EV battery technologies, provide a middle ground for consumers and automakers. They provide the environmental benefits of electric vehicles while maintaining the convenience and familiarity of traditional gasoline-powered cars.
Automakers are choosing the hybrid route
Recently, Jaguar Land Rover (JLR) has announced a shift in focus from solely battery electric vehicles (BEVs) to plug-in hybrids (PHEVs). The company, which initially planned to launch six BEVs by 2026, has now revised its strategy to launch only four, citing unexpected demand for its plug-in hybrid vehicles. Sales of JLR’s PHEV models in Europe are set to grow an impressive 68 percent to 45,224 units in 2023, while EV growth has slowed, leading to this change in strategy.
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On Indian shores, Toyota Kirloskar Motors in India has appealed to the government to substantially cut taxes on hybrid vehicles. In requesting the 21 percent tax cut, the automaker argues that hybrids emit significantly less pollution than gasoline vehicles and therefore should get legislative incentives.
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Maruti Suzuki, the leading automaker in India, also shares similar sentiments and advocates incentives for hybrid vehicles over BEVs. According to Maruti Suzuki officials, BEVs, despite having zero tailpipe emissions, are more carbon-intensive due to their dependence on electricity from coal-powered thermal plants. In fact, Shashank Srivastava, senior executive officer, marketing and sales, MSIL, had earlier said that hybrid vehicles will account for about 25 percent of Maruti’s total sales in the domestic Indian market by FY 2031.
This shift in focus towards hybrids is also supported by a recent study conducted by experts at IIT Kanpur. The study compared the life cycle emissions (LCA) of hybrid electric vehicles (HEVs) and BEVs and concluded that HEVs powered by e-fuels are more ecologically beneficial. This finding establishes HEVs as a viable option for sustainable transportation in India.
The rise of hybrid vehicles signals a possible turning point. As leading automakers such as JLR and Toyota are adjusting their strategies to meet emerging market dynamics, the future of mobility is shaping up to be a diverse landscape, where hybrid vehicles play a key role in driving sustainability and innovation. Are.
Why this change?
As the automotive industry moves toward electric vehicles (EVs), a surprising resurgence of interest in hybrid vehicles is challenging the prevailing narrative. While automakers have made substantial investments in EV technology, recent developments suggest a shift in ideology toward hybrids.
One of the key reasons for this shift is the potential cost savings and the ability of hybrids to address common concerns associated with EVs, such as range anxiety and lack of charging infrastructure. According to Edmunds, the average cost of a hybrid is $42,381, which is less than the average cost of an EV ($59,400) or plug-in hybrid (PHEV) ($60,700) and even a conventional ICE (internal combustion engine) vehicle ($44,800). is much less than. , This cost difference could result in substantial savings for automakers, making hybrids an attractive option.
Toyota, the world’s largest automaker and a leader in traditional hybrids with models like the Prius, has been particularly affected by this change. The company has faced criticism from environmental groups for its strategy of focusing on a mix of hybrids, PHEVs and EVs, which some see as a lack of commitment to an all-electric future. However, Toyota argues that it is meeting the needs of consumers and plans to gradually introduce global adoption of EVs, taking into account the different pace of adoption in different markets.
Additionally, Toyota argues that the environmental impact of producing EVs should be considered compared to hybrid electrified vehicles. The company claims it can produce eight 40-mile plug-in hybrids for every 320-mile battery electric vehicle, resulting in eight times less carbon emitted into the atmosphere.
Toyota Chairman and former CEO Akio Toyoda addressed criticisms of the company’s slow approach towards EVs, saying people are finally seeing reality. This shift toward hybrids represents a pragmatic approach by automakers to balancing sustainability goals with market realities, highlighting the complexities of the automotive industry’s transition toward electrification.
The automotive industry is at a critical juncture where it must balance the move toward full electrification with the practical realities of consumer demand and regulatory requirements. As the industry continues to evolve, the role of hybrid vehicles in shaping the future of mobility is likely to become increasingly important.
First publication date: 14 February 2024, 11:34 am IST