Why Hybrid Vehicles are quietly selling faster than fully electric cars
"Hybrid vehicles maybe two decades old with Toyota Prius first launching in 1997. But these still see a strong demand despite the rising of EVs."
Hybrid cars are seeing a quiet resurgence as the boom in electric vehicles spurs automakers to give the older, cheaper technology a second look.
This year has been an extraordinary one for electric-car manufacturers. Investors have embraced makers of pure-electric vehicles, driving the share prices of Tesla Inc. and Chinese competitor Nio Inc. to stratospheric levels. Drivers are also coming on board, with EV sales from China to Europe rising despite the pandemic.
But the market risks becoming a crowded one, with more than 500 EV models expected to be available globally by 2022. Many conventional automakers are mulling their options, trying to decide which technologies will reign in the decades between now and a full transition away from combustion engines. The investment decisions they make today could determine whether they sink or swim.
While hybrids, which blend the power of a petrol engine with electric motors and batteries, are now more than two decades old — the first Prius debuted in Japan in 1997 — they’re still seeing demand even as EVs loom large. Ford Motor Co. and Toyota Motor Corp. are among those releasing fresh hybrid versions of their flagship marques and investing anew in their hybrid component supply chains. While non-plug-in hybrids aren’t subject to the same sort of generous subsidies meted out to electric vehicles in China, Europe, and California, their appeal has been rising after a multiyear slump.
Hybrids offer savings at the pump, while not sparking the same range anxiety as EVs. And because hybrid cars are supported by a petrol engine, therefore requiring smaller and less expensive battery packs, their overall costs are lower — an attractive prospect for a consumer wanting a car that’s better for the environment but who’s not able to shell out top dollar for a Tesla.
Hybrid sales in the US rose 17% last year from 2018; in the European Union, they rose 22% over the same period as the region braces for tightening emissions regulations. In China, Japanese brands — which claim the biggest share of the hybrid market globally — sold about 30% more hybrids, making the segment one of the market’s fastest-growing. Electric-car sales by contrast increased by 6% in 2019 from 2018, well down on previous years’ double-digit growth.
Ford’s 2021 inaugural F-150 truck, part of the 43-year-best-selling F-series, is set to be the first full-hybrid, full-size truck available on the market. Toyota’s 2021 iteration of its bestselling crossover Rav4 is a plug-in hybrid called the RAV4 Prime that’s the automaker’s most powerful model of the car yet.
Toyota however sees hybrids as a necessary stepping stone to other next-generation technologies. The world’s second-largest automaker is investing heavily in fuel-cell vehicles and battery EVs, Chief Competitive Officer Shigeki Terashi said at a briefing last month, but until those technologies mature, “hybrid vehicles are most practical." Toyota is expected to invest about $13.5 billion through the end of the decade in electrifying its vehicles, as it targets sales of 4.5 million hybrids and one million full-EVs and fuel cell vehicles a year by 2030 or sooner.
Source: Bloomberg
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