Strong demand in China could prove the saviour of the plug-in hybrid globally as the ‘bridge to EV’ technology stumbles at legislative hurdles in the UK and Europe.
Chinese makers now dominate the global PHEV market after sales rapidly grew this year, topped by BYD.
“Initially of European origin, PHEV technology has gradually become a Chinese specialty,” automotive analyst Inovev said in a new report revealing the extent of the Chinese dominance.
Having grown the market so far this year in China, brands such as BYD, SAIC's MG, Geely's Lynk&Co and Chery’s Jaecoo are now targeting Europe with PHEVs that significantly undercut equivalents from established global car makers, providing that crucial element of affordability that the tech has so far lacked.
Lower prices are expected to expand PHEVs' reach beyond their current popularity with fleets and premium brands, where sales are being driven by tax incentives based on unrealistic CO2 figures.
That in turn should protect PHEVs from new measures in both the UK and the EU to clamp down on the tax-swerve element of their popularity and so create a more consistent market ahead of the planned banning of ICE car sales in 2035.
The Chinese push into Europe with the technology has been accelerated by the fact that the EU has exempted PHEVs and variants such as range-extender (REx) EVs, with their bigger batteries, from punitive new tariffs on Chinese-built EVs.
An Conghui, CEO of Lynk&Co parent brand Zeekr, told analysts on the company’s third-quarter earnings call on 15 November: "Lynk&Co in Europe will focus on PHEV vehicles, because those models are not subject to the additional tariff by the EU authorities."
China is the now the undisputed global centre of PHEVs, driven by home demand but increasingly by exports as well. BYD is the outright leader, with 1.48 million PHEVs sold globally in the first nine months, led by the Seal U SUV. PHEVs accounted for just over half the company’s sales, according to Inovev. Geely was second, at just over 350,000, Li Auto third and the Seres Group fourth.
The best-performing non-Chinese company was the Volkswagen Group in sixth, with just under 200,000 PHEV sales globally in the same nine-month period, followed by Stellantis in seventh.
The Volvo XC60 was the only non-Chinese model to make the global PHEV top 20 in 2024, although the car is arguably Chinese as well, given Volvo’s Geely parentage.
Sales of plug-in cars (including PHEVs) in China this year will hit reach around 10 million this year, according to estimates by the bank Bernstein.
PHEVs have largely driven this growth, with October sales up 119% to take a 22% share of the Chinese market. EVs still had the edge with a 30% share in October, but growth was more muted, at 40%.
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