Auto Industry Cranks Up For More Electric Cars As Hybrids Edge Batteries

by Neil Winton

The auto industry has convinced itself it needs to produce more electric vehicles, but there’s one more decision to make – should it go for battery only, or plug-in hybrid.

At the moment, the future looks to be with plug-in hybrids, with battery-only less favored. Meanwhile Tesla Motors CEO Elon Musk is adamant it has to be pure electric. A plug-in hybrid is a mere interim solution on the way to an all electric future, Musk says.

The weight of evidence currently available suggests Musk is wrong. Admittedly, this “evidence” is really subjective, but it comes from reliable corporate players.

According to Schaeffler Technologies AG & Co of Germany, a big privately owned major supplier of components for the automotive and aerospace industries, by 2030 about 38% of global vehicles will be hybrids of one kind or another, while pure electric vehicles (EVs) will account for just 10%. That still leaves just over 50% powered by traditional internal combustion engines (ICE).

GKN, British automotive supplier with annual sales of about $9 billion, reckons just over 20% will be EVs in 2030, but hybrids will account for close to 25%, with a still leading segment of ICE engines. By 2025, most estimates center around 5% for EVs, with Volkswagen out on a limb at 25%, and Mercedes parent Daimler expecting between 15 and 20%. Last year EVs accounted for less than 1%, and estimates for 2020 range from 2% to 5%.

Latest data from Automotive Industry Data (AID) shows plug-in hybrids currently pulling ahead of EVs but with pitifully small market shares. Plug-ins’ Western Europe market share was 0.67% in the first seven months of 2016, while EV’s slid to 0.59%. A total of nearly 57,500 plug-in hybrids were sold, led by the Mitsubishi Outlander and followed by the Volkswagen Golf GTE, and the VW Passat GTE.

According to Paris-based Frost & Sullivan analyst Nicolas Meilhan, electric cars carry fatal flaws and plug-in hybrids will be successful in the mass market. Meilhan also said the building of a fast-charging network is unnecessary and won’t work.