The outlook of hybrid vehicles is looking brighter than it has ever looked, even as the industry grapples with challenging carbon reduction demands by governments around the world. More carmakers are making investments in hybrid vehicles that combine batteries with the traditional internal combustion engine, even though this attracts criticism from investors and environmentalists alike. This development has been driven by high prices and concern over inadequate charging infrastructure for battery electric vehicles (BEVs) in the European and US markets. Consumers are now hesitating on buying more expensive fully electric cars, which they previously often considered before opting for a hybrid because they are cheaper and allow drivers to skirt the problem of where to charge.
The car manufacturing industry has started to realize that developing profitable BEVs is an important long-term goal that could be achieved by renewed interests in hybrid vehicles. This bear market signal has been picked by key global hybrid vehicle market players like Toyota, Honda, Kia and Hyundai, forcing them to streamline their plans on the medium term. However, some car makers who phased out plug-in hybrids models from its range are reintroducing the technology as they come to the realization that customers were taking longer than expected to embrace fully electric models.
To own a fully electric car will be easier and cheaper with time but hybrids will play an increasingly important role in the industry’s transition. As forerunners, they will be here for an extended period of time. Although, the demand for BEVs have been increasing over the past three years, sales growth slowed in the US and Europe in the new car market segment. Data have shown that EVs are a clear destination for many customers but it’s going to take longer for the car industry to get there than were initially thought.
Hybrids allow carmakers to cut emissions while drawing out the final years of the combustion engine that has been the industry’s cash cow for the past century. They come in several varieties.
- Plug-in hybrids or PHEVs can run for dozens of miles on electric power alone and be charged at home, though their large battery means they are generally expensive.
- Full hybrids combine a smaller battery and a traditional engine that run together, making them cheaper both to buy and run. Full hybrids are highly profitable, often with double-digit margins that surpass those for traditional engine-only or plug-in hybrid cars, and certainly BEVs, which are often lossmaking.
Analysts are gradually accepting that hybrids will be critical in helping the industry to bridge the extended transition to BEV’s, even though the hybrid models continue to draw criticism because of their internal combustion engines and its carbon ramifications.
Automakers around the world are at various points in the quest to meet these aggressive targets for fully electric vehicles but it’s rather exciting that the United States will be the deciding battle-ground for the effective longevity of hybrid vehicles. This seemingly harmless notion for a country with longer commuting distances and a more entrenched love for petrol-guzzling engines has the capability to maintain or destroy the narrative.