EV shoppers in US left worrying about range as the rest of the world plugs in

Sep. 21, 2023

PHEVs a gateway drug for newcomers to the electrified automobile world

Even as the number of makes and models of full electric cars (BEV) on offer around the world balloons shoppers appear to be increasingly flocking to plug-in hybrids (PHEV).

PHEVs offer, in a way, a bridging technology (or a gateway drug) for newcomers to the electrified automobile world in a way that conventional hybrids (HEV) do not.

With the likes of a Toyota Prius, the conventional hybrid that started it all back in 1997, while you may appreciate the good mileage and may enjoy fine-tuning your regen breaking skills at traffic lights, your car habits would not change fundamentally.

While globally HEVs make up some 30% of the electrified vehicle market, in Japan the segment is responsible for more than 91% of EV sales. Old habits die hard.

Plugging a gap in the market

PHEVs enjoyed a 21% market share in the first half of 2023, up from 19% in the same period last year and just 15% in 2020.

Shy of 1.8 million PHEVs rolled out of showrooms over the first six months of 2023 and in terms overall passenger car sales including gasoline-powered ones, this type of vehicle has cornered 5.0% of the global market year-to-date. Worldwide, PHEV sales are up 50% year-on-year while 34% more BEVs have been sold over the same period.

At the same time, the battery capacity of the average PHEV sold globally has been going up steadily. The Adamas Intelligence EV Battery Capacity and Battery Metals Tracker indicates the average size reached more than 19 kWh in 2023 versus nearly 14 kWh in 2020 and less than 12 kWh five years ago. The PHEV parc has ballooned to more than 10m over the last decade.

PHEVs going for a song

Surprisingly in the Americas (Canada and the US represents 97% of the Americas EV market), the market position of PHEVs has deteriorated and market share in the region is down to just 12% versus 21% in Europe and 23% in Asia-Pacific.

Given the still limited public charging infrastructure that fuels the top concern of prospective EV buyers – range – you’d expect the US and Canada would be most appreciative of a best-of-both-worlds solution.

Yet the average battery capacity of PHEVs sold in the Americas is below 16 kWh versus more than 22 kWh in Asia. What US EV’s lose in the swings they attempt to make up in the roundabouts: BEVs in the Americas have a world leading average battery capacity of over 80 kWh versus less than 60 kWh in Asia-Pacific. But that does little for maximum range.

In China, plug-in hybrids have cornered 30% of the market. Indeed, 2023’s overall top selling electrified vehicle is a PHEV – the BYD Song Plus DM-i. The Song sports a range of 1,000km including 150km in fully electric mode and a price tag of $27,000. Given the cutthroat competition in that market it could probably be had for less.

Other PHEVs available in China like those from Li Auto are ultra-marathoners. The barely 3-year old manufacturer’s L9 Max model falls into a subset of the plug-in market, the range extender, where the gasoline engine is only there to charge the battery. The L9 can just about get you from San Francisco to Los Angeles – and back – on a single charge and a single tank.

In the US specifically, the PHEV share is only 11%. Jeep vehicles dominate the market and outsells its nearest PHEV rival Toyota 3:1. The best-selling Wrangler 4-xe has an overall range of 600km and can travel 33km fossil-fuel free. MSRP is $54,735. The Wrangler does not compete in the same segment as the Song or L7/8/9, which are family friendly SUVs so perhaps not a fair comparison. But still.

A bevy of options

Chinese car shoppers enjoy an embarrassment of riches with 110 different brands and more than 300 different electrified models to choose from that spans all possible segments and configurations, including some that shouldn’t really exist (a Wuling Air anyone?).

Another factor that could explain the rising popularity of PHEVs in Asia is the inexorable rise of BYD as the company most likely to kick Tesla from its perch. BYD’s EVs now outsell Tesla on a global basis (including in July this year).

The car and battery manufacturer’s model line-up is split nearly in half between BEVs and PHEVs and of the latter, 9 different models are available including the Destroyer, which may sound like it should be a rugged off-roader but is indeed a rather nondescript compact sedan.

Consumers in the US who are considering putting internal combustion engine-powered vehicles on ice have much slimmer pickings. In the US just over 30 marques compete to put drivers into 115 different models.

EV penetration based on 2023 registrations has reached a smidgen under 18% in the US. In contrast, EVs make up 31% of the cars sold in China in 2023.

The US Inflation Reduction Act calls for a 50% EV sales mix by 2030.

The US would have a much better chance of reaching that goal if shoppers had a choice between Destroyers and Avengers on home soil. The Jeep is not a plug-in, but a wide range of options and a long range are exactly what gets car buyers excited.


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