June 17, 2021

Gp Delivers

The excellent automotive artisans

Once ‘green’ plug-in hybrid cars suddenly look like dinosaurs in Europe

Automakers say plug-in hybrids, used properly with electric as the primary power source and combustion as a back-up, emit far less than conventional cars. They add that the models are a popular transitional choice for consumers who want greener travel.

Plug-in sales in the EU more than trebled to 507,000 vehicles in 2020, almost as many as the nearly 539,000 full-electric vehicles sold.

Gauging automakers’ investments on plug-in models is hard because they only announce broad “electrification” plans. Consultancy AlixPartners estimates automakers and suppliers will invest $200 billion in electrification from 2020 to 2024.

German engineering specialists FEV estimates fitting a battery, motor, and electronics to a combustion engine car to make a plug-in model, costs up to 4,000 euros ($4,700) per vehicle.

European automakers are dividing over whether to fight for plug-in models or spend their financial and political capital accelerating the leap to full-electric vehicles and pushing for better charging infrastructure across the continent.

Stephan Neugebauer, chairman of the European Green Vehicles Initiative Association, told Reuters technology improvements will mean future plug-in vehicles rely less on their combustion engines, making them fit for the green transition over the next decade and even beyond.

“Will all customers buy battery electric vehicles in 10 years, or nine years? We don’t think so,” said Neugebauer, who is also BMW’s director of global research cooperation.

“Why? Because sometimes you have to make a long-distance trip, you go on holidays, you have to pull a trailer. And for this, you need public charging infrastructure. And this will still be a critical issue.”

BMW and Renault, which have not set a date for going all-electric, are among the companies firmly in the hybrids camp.

BMW boss Oliver Zipse said last month that they were “a great consumer product” and there would be a market for them even without subsidies. Renault CEO Luca de Meo said in February that plug-ins “will be part of the landscape for the next 10 years easily” and were more profitable than conventional cars.

Volvo Cars CEO Hakan Samuelsson told Reuters: “It’s a bit disappointing they (Brussels policymakers) don’t see the value of a plug-in hybrid.” But he said his company, which aims to be all-electric by 2030, was more focused on pushing the EU to make member states invest heavily in charging infrastructure.

“If we in the car industry invest in electric cars, and do that very rapidly, I think our credibility to ask for investments in the charging network increases,” he said.

“The limit of what is achievable”

The European Commission is due to propose at least a dozen pieces of legislation to slash emissions across all sectors this year.

Current drafts of the EU’s sustainable finance taxonomy, a list of economic activities that from next year will determine what can be marketed as a sustainable investment, exclude manufacturing of plug-in vehicles from 2026.

That could deter the army of investors seeking assets with green credentials. It could also potentially restrict public funding if governments moved to align their spending with the taxonomy.

While many countries still subsidize plug-in cars, the Netherlands scaled back tax breaks for them in 2016. By 2020, eight times as many full-electric vehicles were sold in the country as plug-ins, compared with four times as many hybrids as EVs four years before, showing how government policy on vehicle technology can have a major effect on consumer behavior.

A consortium of researchers, commissioned by the EU and known as CLOVE, this month recommended that so-called Euro 7 rules should tighten car emissions limits for pollutants including nitrogen oxides and carbon monoxide from 2025. Its recommendations are not binding, but aim to inform the European Commission’s proposals, due later this year.

Transport & Environment, part of the Commission’s expert group working on the standards, said the proposals would force automakers to fit lug-in hybrids with expensive technology to curb emissions from their combustion engines.

Hildegard Mueller, president of German auto industry association VDA, said the proposals were “at the limit of what is technologically achievable.”

“We still have to be very careful that the internal combustion engine is not made impossible by Euro 7,” she said.