When I heralded 2024 as the “Year of the Hybrid” in The Morning Dump back in 2023, it was timed precisely to a huge increase in hybrid car sales. It seemed obvious at the time that EV sales weren’t going to increase at some geometric rate, even though many still acted as if that was the case. I feel safe in saying that the rest of the decade is going to go to the hybrid.
The limited sales data we get from some automakers in October is out, confirming the massive negative swing in electric car sales due to the expiration of the EV tax credit. At the same time, hybrid sales are exploding and are likely to continue for the foreseeable future.
Do you want some great news? The chip shortage I wrote about on Friday may have a political solution, although I wouldn’t count my wafers until they’ve been fabricated. Also, Škoda is having a great year. That’s something to celebrate.
S&P Projects A Huge Share For ‘Electrified’ Cars
If I’m being 100% real, I did initially want to call this the “Decade of the EREV” given what’s coming from various automakers. America loves big trucks, and big trucks either require massive batteries or some other tradeoff in order to do big truck things. An obvious solution is to pair a generator engine with a battery pack that isn’t the equivalent of four Nissan Leafs.
I still think EREVs and, to a smaller extent, PHEVs will be a part of the picture. It’s just that full hybrids (FHEV) and mild hybrids (MHEV) solve so many problems at so low a relative cost that it seems like a no-brainer for almost every car out there. S&P Global Mobility is out with a fancy new chart showing the potential future mix, broken down by region:
S&P Global does great infographics.
As you can see, this is how much of the total share of various markets will be electrified in some sort of way. This ranges from 48v MHEVs all the way up to full BEVs. I can’t think of a single vehicle for sale that couldn’t be at least an MHEV, so it’s interesting to see that this isn’t the biggest area of projected growth. It’s hybrids.
There are a few reasons for this. Mostly, it’s just the cheapest way to solve the following problem: Electric cars are way more efficient than gasoline-powered cars, but gasoline has a way higher energy density than current batteries, which are not cheap.
My current CR-V Hybrid is floating around its 37 MPG combined average, and I never have to think about it. When it’s puttering around town, it’s mostly using stored energy. When I get going on the highway, it turns the motor on when necessary.
The other reason for hybrids coming in strong, as S&P Global Mobility notes, is that the regulatory environment in the United States is too unpredictable. We have a system wherein the Executive branch can dramatically change the universe in which carmakers exist. Flexibility is key, and while you can make a vehicle that can accept EV and ICE powertrains (this is what’s interesting about the BMW iX3), it does create some compromises:
Overall, manufacturers are shifting their focus toward flexible powertrain system strategies that can accommodate regulatory uncertainty and changing consumer preferences. The US market is likely to witness increased experimentation with transitional technologies such as REEVs and hybrids, as the industry navigates the complex interplay of incentives, policy, and consumer demand.
It’s all about flexibility going forward, although most companies will likely still create EV-only platforms to address the growing market for EVs. Looking ahead to 2030, if this projection is correct, then an increase in BEVs will be dwarfed by EREVs (they call them REEVs), MHEVs, PHEVs, and just plain old hybrids. That sounds right to me. [Ed Note: I think this study is underestimating EREVs/REEVs, but we’ll see. -DT].
October Sales Back Up The Trend
It was always clear that this month was going to see a massive reduction in EV sales as buyers stocked up on EVs while the $7,500 discount was still in play. So far, Hyundai, Kia, and Ford are out with October sales data, and this seems to support the “Decade of the Hybrid” thesis.
Let’s talk Hyundai, which saw its ongoing year-over-year sales streak finally come to an end as year-over-year sales dropped by a nominal 2%.
“Hybrid vehicles led the way in October with a 41% increase, and electrified sales were up 8%,” said Randy Parker, president and CEO, Hyundai Motor North America. “We saw strong EV demand leading up to the expiration of federal tax credits, and while that shift has temporarily disrupted the market, we’re confident it will reset. Hyundai’s momentum remains strong, and we’re on pace for record retail and total sales for the year. Solid fundamentals, smart inventory strategy, and an exceptional team and dealer network power us.”
I’m not a math genius, but if hybrid sales were up 41% and “electrified sales” were only up 8%, that means EV sales had to drop. Yup! The Ioniq 5 was down 63% year-over-year, and the Ioniq 6 dropped 52%. The cheap Venue was the biggest winner, up 49%, but the most important number for Hyundai was the 15% increase in Tucson sales.
Kia managed to keep its sales streak going by selling an extra 94 cars! That’s tight. The cheap Niro saw a huge 75% year-over-year increase, but the real winner in my heart is the now-hybrid Kia Carnival, up 35% over the same period. Ford’s total sales were up by about 2% in October, with electric vehicles down 25% and hybrids down 4%.
What’s up with hybrids? Ford is winding down sales of the Escape, which had a hybrid model, and hasn’t yet replaced it with a Bronco Sport Hybrid. Maverick sales were still up year-over-year, though I’m not sure of the breakdown of hybrids v. ICE for that or the F-150.
The Chip Shortage That Maybe Just Went Away
Full disclosure time: Our co-founder, Beau, has a few other businesses in addition to being a part of this one. Remarkably, there has been little to no editorial pressure or conflict of interest. There was some over the weekend, and I just feel the need to call it out when it happens, for the sake of journalist integrity. On Friday, I wrote about the Nexperia chip shortage that threatened to derail the auto industry. I made a joke about the film Breakin’ 2: Electric Boogaloo, noting that the film “was neither very good nor popular.”
Beau let me know via a stern text that not only did he think the film wasn’t so bad, but that he actually saw it in the theater. The only time I’d seen the film was projected on the wall of a house party in college, and was therefore not fully paying attention.
Taking any critique of my work seriously, I watched more of the film this weekend and looked up contemporaneous reviews. Roger Ebert actually gave it three stars, and made it clear he liked it better than Annie, which he didn’t like:
Remember all the self-importance of “Annie“? That’s why a modest, cheerful little movie like “Breakin’ 2: Electric Boogaloo” is so refreshing. Here is a movie that wants nothing more than to allow some high-spirited kids to sing and dance their way through a silly plot just long enough to make us grin.
Perhaps I was being too glib. I regret the error, but I also want you to know that we take editorial independence seriously here and that the Morning Dump will not be caving to pressure (from a certain North Carolinian taillight enthusiast) regarding my belief that “Son in Law” is the best Pauly Shore movie.
Oh, right, chips. Yeah, that whole thing with the politically-charged chip shortages seems to have resolved itself, according to this Bloomberg report:
Following the trade truce agreed by presidents Donald Trump and Xi Jinping at their summit last week, the US said on Saturday that Beijing will take steps to allow the Chinese facilities of Nexperia to resume shipments. This move, which confirms an earlier Bloomberg report, will likely ease worries about chip shipments that had threatened auto production as a trade fight between China and the US escalated.
The Dutch and Chinese arms of the same company are still beefing, but it sounds like they’ll keep doing their respective jobs and not disrupt a whole industry while they work out their issues.
Škoda Stays Singularly Superlative
My favorite modern Czech automaker (suck it Kaipan!) is the one arm of Volkswagen that doesn’t seem to be sweating it all that much. It doesn’t sell cars in North America, it never earned a huge stake in China that it’s suddenly losing, and it makes the kind of nice and cheap cars that consumers want.
According to a company sales release, through Q3 the company’s sales are up 14.1% year-over-year, and its balanced portfolio of ICE, EV, and hybrid vehicles is leading the company to big sales in Europe. Only Cupra is doing better, but that’s a relatively new automaker with less than half the volume.
It’s also expanding in markets like Vietnam and India, which are so far not as impacted by the global trade war:
Klaus Zellmer, CEO of Škoda Auto, commented: “Škoda’s strong nine-month results prove that our strategy is working: We are growing profitably, electrifying faster, and expanding globally. Holding firm as Europe’s No. 3 car brand while doubling deliveries in India shows the power of our team, our partners, and our customer’s trust. We’re driving forward with confidence, efficiency, and the courage to shape the future of mobility.”
Superb!
What I’m Listening To While Writing TMD
My wife put on “November Rain” by Guns N’Roses to celebrate the dawning of a new month, and I remembered that she wasn’t an MTV kid and had therefore not seen the extravagant video. If there’s a better way to start this month than Stephanie Seymour taking a luxurious pull of a cigarette, I’d like to know it.
The Big Question
Decade of hybrids, PHEVs, MHEVs, BEVs? What do you got?
Top photo: Honda
I drove a Skoda Octavia in Ireland for a week in Sept. it was supposedly some kind of hybrid although you’d never know it apart from the gas mileage – which was something around 40mpg. Oh and it would also auto stop-start when coasting at highway speeds, which again you wouldn’t have suspected but for the fact it told you. It was nice to drive, handled well, and would have been a great daily in every way. Except it’s a car, and Americans, don’t seem to want cars anymore.
Matt, there’s only one song for when the Gails of November come early.
https://youtu.be/FuzTkGyxkYI
I have to admit I don’t know much about how VW / SEAT / Skoda operate in Europe. To me they look like VW’s with a different badge, but that’s probably because I easily recognize a VW’s shape and only then notice a funny badge on it.
Is it kind of like when GM had Chevy, Pontiac, and Buick all making the same car just with slightly different trim levels and accessories? Do their markets overlap by a lot? Are their perceived quality and reliability the same or are some countries Skoda countries and look down on a VW? I guess in the end I don’t know why they exist if they’re selling the same product line, but then again I also don’t understand why GMC exists today.
In Europe, the ‘standard’ or ‘mainstream’ car is what we’d consider ‘semi-luxury’ like Buick, which were incidentally rebadged Opels/Vauxhalls, which is what the VW brand competes against. Skoda is positioned as a ‘budget’ brand, which we’d call ‘mainstream’ like Chevy. GM is the only conglomerate in the US market to still make this distinction and push Chevy’s product quality cheaper (like the Equinox), while basically everyone else covers semi-luxury with their top trim packages nowadays.
I have no idea how SEAT is positioned other than non-luxury ‘sporty’; maybe they aren’t stuck with the puny base engines Skodas get?
As for reputation, in India Skodas seem just as fancy as VW as they tend to sell larger models while the latter continues to sell more popular smaller models. In China, VW was the most popular brand for a long time as they were the first foreign carmaker to enter China back in the day, and its even spawned spinoff subbrands like ‘Jetta’ which currently sells at least 3 models including a crossover. Skoda sales are alright and beat all the French brands in China, but they don’t have the brand goodwill of VW. VW is positioned less luxuriously like the US in China anyways, so the fact Skoda gets any sales at all is impressive imo.
Thanks, that comment is full of info without going too long. Speaking of brand goodwill, are VW/Skoda/SEAT held in a positive or negative light after the cars are 10 years old, who are their competitors, and does anyone there even care about repairability / reliability? I have to admit I’m biased against them as one of the most unreliable car manufacturers out there, but I missed the malaise era and 7/11 of my last cars were Japanese built, and the 2 VAG cars in the mix were the worst ones I’ve ever owned.
Can someone give a pointer to an explanation of what all these classes are? In particular, series hybrid v. full hybrid v. the two varieties of mild hybrid. And possibly REEV v. series hybrid.
Or, this could be an explainer article by David or Thomas maybe.
REEV / EREV and series hybrid are exactly the same thing: Electric car with a generator plugged in.
The reason Toyota developed their series/parallel e-CVT system (and why Honda did a similar type of system) is that in a series hybrid at highway speeds the electric motor depletes the batteries faster than you can charge them with a generator, unless you oversize the engine. A much better option is to just let the engine drive the wheels at highway speeds, which is what the Volt did.
Your explanation of the problem with series hybrids at highway speeds is a bit off, as they can easily generate enough power if paired with a big enough generator motor. Instead, the problem is that transmission efficiency of a series system (converting rotational energy to electricity, run it through the battery + inverter, then convert electricity back to rotational again, plus a single-speed gear reduction) is significantly lower than using a mechanical transmission (simply a gear reduction). This not only reduces fuel economy, but all that wasted energy needs extra cooling.
We’ll likely see a good example of this with the 2027 Nissan Rogue hybrid next year if it uses their current system which is a pure series hybrid.
They must be different things, otherwise S&P Global wouldn’t be able to sort them into separate categories.
Thus, I’m looking for definitions.
As I explained above, it’s a strange designation that’s likely an artifact of covering completely different types of vehicles. Presumably they mean ‘Series hybrid’ to be a very specific type of FHEV, and really doesn’t need to be its own designation. If we want to compare what I think they meant by ‘Series hybrid’ and EREVs, EREVs have much bigger batteries which can be charged via plug, while the small batteries in ‘Series hybrids’ are only charged by regenerative braking.
This should be an article but I’ll explain a bit.
ICE & ICEss: self explanatory conventional fuel vehicles
MHEV: Usually using a small 48V battery and a dedicated belt motor at the front of the engine, it basically acts like a beefed up start-stop system that can crank the engine faster and charges the battery via engine braking rather than by the alternator. They usually also supplement a bunch of torque at low RPMs during takeoff.
MHEVe: A designation that’s new to me, probably too granular but I like it. These are newer MHEV systems that are ‘strong’ enough to turn the ICE off when moving, like at takeoff, parking lot speeds, and when braking to a stop. This involves the motor being powerful enough to start the ICE fast enough when it’s caught off guard. Seen in a couple cars in the US recently, like the I6 Mazda CX-90 and one of the BMW X5/X7s.
FHEV: The hybrid you’re thinking of when you hear hybrid, like the Prius. Unlike MHEVs, they use high-voltage batteries (the threshold between low and high voltage is 50V for safety reasons) and the electric motor is integrated into the transmission in some way. Only very early systems in the 2000s weren’t capable of ICE-off propulsion.
SERIES hybrid: Not sure why this is distinct from FHEV or EREV/REEV, it doesn’t really make sense in this context; I’m assuming they mean Series FHEVs. We don’t really get pure series hybrids in passenger cars in the US, but the upcoming Nissan Rogue Hybrid (a FHEV) might be the first in a while; they are the default transmission in diesel-electric trains and seem common in hybrid transit buses. In a series hybrid, the ICE is used to generate electricity which then powers the drive motor; the ICE has 0 mechanical connection to the wheels. This is mechanically quite simple and cheap, but somewhat inefficient on the highway. This is opposed to a parallel system, where the ICE and motor can both mechanically drive the wheels. Series and parallel are more descriptors of transmission architecture rather than classification, as in reality most FHEVs and PHEVs can switch between series and parallel operating modes depending on the situation.
PHEV: Basically a FHEV with a bigger battery with a plug to charge it, so the battery is charged by wall power in addition to regenerative braking while a FHEV is only charged by the latter. The bigger battery *usually* allows for a significant EV-only driving range on battery power, and will operate like an FHEV once the battery is depleted.
REEV/EREV: A subset of PHEVs which use series-only drivetrains, so the ICE never mechanically powers the wheels. Philosophically, EREVs are more like BEVs with a generator onboard, while PHEVs are more like FHEVs with big batteries. Since the difference is arguably just semantics, several organizations including some governments don’t distinguish EREVs from PHEVs. EREVs’ series drivetrains can allow for weird ICE placements, like in the upcoming Scouts. They are also guaranteed to output their maximum claimed power through their motors with the ICE off, while PHEVs may need to turn on their ICE to achieve peak power as their EV mode power may be lower.
BEV: Pure electric vehicle which uses batteries as an energy source.
Thanks for that. A lot to digest. And as you say, some of those distinctions are still not clear. Has anyone got access to the S&P Global article/paper/whatever, which might have their definitions?
I still find hybrids to be an infuriating waste of BEV potential. Once you think about having a built in “power plant”, then the absurd stacks of infrastructure needed to deliver fuel to that power plant…I’m not just doing a BEV “actually, your infrastructure is bad” bit (I won’t deny it started there), it’s just immensely frustrating to me now.
Working backwards: You need an electrically-driven pump to put a petroleum fuel in your car’s tank, from a large tank underground that’s supplied by tanker trucks that, themselves, run on petroleum fuel. Sometimes there are multiple deliveries in a day.
Then, there are often multiple such stations clustered on an intersection, and these are distributed through every city and along every interstate in the thousands? Tens of thousands? We’ve got >330 million people in this country and a lot of them drive petroleum-fueled cars. (Sometimes with a mix of corn ethanol, which I’ve recently been informed is an efficient fuel supplement.)
Those tankers, then, are delivering from centralized refineries that process an incredible amount of fuel for an entire region (in which fuel prices are, apparently, directly affected by their state of function). Those refineries need to have oil delivered to them by pipelines, or yet more vehicles that also run on petroleum fuel, from extraction sites like oil rigs.
And to bring things back to the pump, it seems they’re a big part of the weird finance/payment services system that skims almost every transaction in the entire national economy. I’m sure the fast-charger payment systems can also get wonky, but level 1-2 charging at home avoids them entirely instead of making them a practically unavoidable fact of living (last I tried, you can pay cash and save a little, but the process clearly isn’t designed for it at this point).
I mean, I’ve barely mentioned my frustrations with the hybrid powertrain itself beyond “redundant”, but that mess of infrastructure behind ICEVs is huge and definitely not free. In some ways, we’re paying for that massive network’s operation, maintenance, and expansion. Avoiding all that while making a car that’s better by most measures is an irresistible opportunity.
Contrapoint #1: BEVs are an infuriating waste of PHEV/EREV potential. As Toyota has pointed out numerous times, and been proven correct numerous times, is that it is far more efficient in terms of resources and environmental impact to give 10 cars 30 miles of EV range than 1 car 300 miles of EV range. For most trips taken by most people, 30 miles of EV range will suffice, and if you need longer range most people would prefer to fill up quickly at any of the readily available gas stations rather than hunt for an EV fast charger that will still take several times longer to get you back to full range. PHEVs/EREVs are a better fit for most people, which makes them the environmentally optimal option.
Contrapoint #2: The electrical grid is at least as complex, if not more so, than the petroleum distribution grid. We just don’t see it at a consumer level because you plug whatever into the wall, and magic electron juice comes out. But as energy demands increase, there will need to be substantial upgrades to the grid that will come with accordingly substantial costs.
First, I think 300+ miles of range is a stupid metric that keeps the heaviest and most expensive part of an EV excessive, and adding 70-200 miles to that 30 miles couldn’t be more burdensome than adding not only an engine, but all the associated subsystems like the transmission (and then we’re driving the front wheels for packaging again? Maybe not on a series-hybrid) and emissions controls.
Second, the difference is that petroleum needs that massive distributed-centralized system with transport costs at every step, etc. If we could make gasoline without the giant refineries, we absolutely would, because closing refineries make prices go up. It’s not an option we have.
Second part two, electrical generation can be optimized, and can also be set up from almost any source of “energy” we know of.
Wind, water, any source of heat that can boil water into steam ranging from coal to splitting the atom…or set up a stationary ICE generator that isn’t compromised to work in a small vehicle, which could then even charge multiple vehicles as a single unit instead of one-per-car. There are endless options and most are highly scalable.
Ah, and I should add that giving up the circular narrative of “range anxiety” means we can turn attention to chemistry options like sodium-ion that give less range, but don’t make this hypothetical “trade” of scarce minerals a factor.
Last I checked they weren’t offering a price advantage, but only because lithium prices were unsustainably low. I also saw an interesting article recently about potential for recovering rare earth elements from mining waste that would lessen the minerals issue as well.
Never gonna happen.
Giving up range anxiety, adopting/developing sodium-ion chemistry, sodium-ion gaining a price advantage, or recovering rare earth elements from mining waste?
I assume it’s the last thing you’re referring to?
Giving up range anxiety. Only when recharging takes as little time as gassing up will this change.
I think Sodium-ion batteries are great, but they won’t really become commercially viable until there is high enough organic demand for good cold weather performance that LFP lacks, which North America and Nordic Europe is most likely to provide. This is because while Sodium is cheap, Lithium prices and supply has stabilized seemingly at a sustainable level in 2025 afaik. China has gotten so far ahead that CATL is starting Sodium-ion production to cater to China’s relatively small northern populations who’ve spurned the otherwise dominant LFP.
From what I’ve read, Na-ion uses the same supporting minerals as current Li-ion, which could mean Manganese and Cobalt oxides like NMC or Iron and Phosphates like LFP, plus graphite anodes.
This is not true. Mini refineries are used all over the world. You can buy one off of frigging AliBaba if you are so inclined. Refining crude oil into usable products is not that hard of a technical exercise. What is hard is doing so in an economically viable way, and giant refineries with their attendant giant supply and transport chains exist because economies of scale are a thing, and all of that very expensive infrastructure pays for itself very quickly.
Yes, but the problem with electrical energy is and always has been distribution. Unlike a gallon of gas, a kilowatt of electrical power is not fungible. A kilowatt pulled straight off of an offshore wind turbine is something like 300 watts by the time it comes out of the wall of a consumer in a city, and several times more expensive. There is a colossal amount of infrastructure hiding in plain sight that keeps our power grid running, and ever-increasing demand is requiring ever more sophisticated engineering to keep things stable. It’s pretty much the opposite of scalable, it’s diminishing returns.
Toyota is lying to you… (and they have a clear bias)
Mmmm… the market (both investors and consumers) think otherwise. As someone who works in transportation and energy, I think otherwise too. Full-range BEVs spend the vast, vast majority of their lives hauling around a lot of excess mass to store a lot of excess energy, wasting a lot of watts.
Opinion of the market does not alter whether or not Toyota is lying or not, let’s just be clear about that… Even with that excess mass, EVs are still far more efficient per mile than a HEV, PHEV or EREV. Toyota’s 1:6:90 figure is pure fantasy and should be treated as such…
This is another issue. As i understand it, heavy EVs are using expensive, special tires, that wear out especially quickly. And the roads they drive on are not made for traffic that is on average that heavy. Not to mention bridges. Bridges are designed with a significant safety factor, but when you combine the poor state of US infrastructure with the increased amount of traffic, whether running or packed bumper to bumper, with an additional possible factor if the average vehicle increases in mass by 1000 pounds or more, that is worrying.
That entire infrastructure supports a power source that is an order of magnitude more dense than any commercially available battery.
My truck can carry ~1600 kWh of energy on board, and replenish it at a speed of ~20,000 kW at any highway exit in America.
Unless and until there’s a paradigm shift in battery or recharging speed, EVs can’t be the only solution.
Everything has tradeoffs, which is why a varied product mix makes the most sense. Optimizing for your preferences (or mine) only isn’t the solution.
Sure, I did not mean to suggest anything like “ban all hybrids”. I’m upset by the idea of them being the “dominant” solution by a significant margin, because I don’t believe they’re the best solution for “most people”.
And that came across as “I just hate hybrids” because it seems the accepted narrative here is “hybrids are the perfect compromise”. I should have expressed that more thoughtfully.
(Edit: Though in defense of my taking that for granted, the article is titled “the decade of the hybrid is here”.)
In a way, I also think it represents an attachment to status quo/familiarity I take issue with.
Or more directly, the idea of half-measure “compromises” that avoid or satisfy a dispute without actually adopting a good solution or rejecting a bad one.
That may not ultimately be the case with hybrids specifically, but that’s what I would associate them with.
Fair, and I can see this argument, but status quo bias and uncertainty regarding new things is a much broader topic than just cars and arguably has millions of years of evolution behind it.
It’s a huge amount of inertia of already available infrastructure. If the petroleum infrastructure wasn’t already in place, I doubt there would be much motivation to implement it vs. sharing the electric grid that is used for many other uses. It’ll be interesting to see what developing countries do in the coming years- continue to build out the old petro tech, or realize they can swap to electric based infrastructure, and generate power themselves. Sort of how they skipped land line telephones, and went straight to cell phones.
Personally, now that I’ve experienced the ability to generate power with some panels on the house roof, and refuel at home, anything that requires the huge centralized infrastructure of petroleum seems like a huge step back.
I agree with this as someone that tried to go hybrid in 2022 but ended up going BEV in 2023 due to long waits and dealer markups for hybrids.
Outside of refineries that generate their own electricity, much of the infrastructure to deliver gasoline to a car’s fuel tank relies on electricity from the grid.
In 2023 after some severe weather hit our area, many of the gas stations lost power. The local terminal where fuel trucks are filled lost power. The few gas stations that had power to the pumps ran out of gas before the fuel trucks could make the four hour drive from the closest terminal with power. There were some DC fast chargers that still had power. We never had an issue charging while power was being fully restored. People with ICE vehicles were dealing with fuel shortages all week.
How is it that power was out, but DC fast chargers were working? Is it that they were in the same areas as the gas stations that also still had power, both due to luck of the storm?
This is an argument that was also made a bit further up the thread, and I think it is a little specious, or at least ill-contrived. Until such time as multi-ton service trucks that need to travel great distances are economical to be EVs, the opposite would also be true: all that electrical infrastructure must be serviced by ICE vehicles. Saying that gasoline infrastructure is made invalid because it requires electricity is a non-point. At worst, it is slightly ironic. Everything today relies on electricity in some way.
Only kicker to this prediction – Cheap Chinese EV’s infiltrating the US Market.
If the Chines OEM’s get full access to the marketplace in the US, we will see a huge jump in EV sales, just based on pricing alone. See the $ conversion of the BYD Seagull, Xpeng G9, Xiaomi YU7 and understand how doomed the US legacy automakers are.
Protectionism will be the only saving grace against the looming flood, but considering transportation is the second highest recurring cost for most homes, cheap cars will be king, and anyone is going to do what they can to save a buck (in some cases, 30-60% savings). I’d argue it’s the decade of the hybrid, only because BEV is still expensive here in North America.
I don’t think Chinese EVs are going to be for sale here anytime soon, if ever. Not counting the odd Volvo EV or something similar where it’s mostly a Chinese domestic EV dressed up as something from another brand.
If you were a US politician who can secure a guaranteed cost reduction in transportation by 40% (at the expense of domestic manufacturing), wouldn’t you allow that to happen? Especially if you’re easily swayed by grift and “donations”.
Aside from the fact that I personally find the idea of being a politican for a living almost as objectionable as manually clearing bowel obstuctions from farm farm animals, I just don’t think the existing domestic auto manufacturer and petroleum lobbies are likely to allow it to happen, given they’ve been so dominant for the past century or so.
I’m not saying Americans wouldn’t buy Chinese EVs if they were an option here… I’m sure some would. Though I also think that if Chinese EVs were sold here, they wouldn’t be nearly as cheap as they are in China, what with export costs, federalization, tarrifs, etc…
Plus, I get the impression (anecdotally) that Chinese EVs spontaneously combust even more often than those EVs already sold here… once that started happening stateside in any numbers, I expect there’d be a big backlash too.
Protecting the US auto industry from the Chinese is one of very few remaning issues that has bipartisan support. There would have to be a major shift in trade policy for this to happen (and if you are alluding to a US government purchase of Chinese vehicles, add in a total rewrite of federal procurement regulations).
It’s not at all an apples-to-apples comparison even when converting for exchange rates, especially so on the bottom end of the market. Such a large part of the cheaper, heavily subsidized Chinese EVs do not comply with US FMVSS, specifically crash structure, and the Seagull is a great example. BYD Dolphin Surf, the Euro compliant (effectively US FMVSS compliant) equivalent to the Seagull is about 27k USD (23k Euro) and gets under 200 miles of range in real world driving. This wouldn’t sell for a second in the US when we’re getting the Bolt and Leaf that both start marginally more than 27k and get 260-300 miles of range.
This is to say some may be decent deals if they were to hit US shores, but the “vast superiority” of Chinese EVs is overblown. The CLTC cycle for testing is wildly overly optimistic and has done wonders for the Chinese EV superiority narrative. The Model 3 Long Range + RWD gets an insane 830km CLTC rating (~500mi) and gets a 350 EPA rating, and about 315 real world. Take that 30-40% optimism and apply it to every single chinese market EV’s stated range.
Not to mention that the prices Chinese EV manufacturers are selling at in China are not profitable, highly subsidized, and propped up in part due to zero-mile-used export sales to hit sales quotas from provinces that give kickbacks to those manufacturers.
While pricing in China makes the US legacy automakers seem doomed, there’s several caveats and exclusions that need to be made. First, China subsidizes their automotive industry by an unknown amount, driving prices down and keeping several mediocre companies in business for longer, which the more competent automakers still have to cut prices to compete with. Second, range demands are lower in China (and worldwide in general) and the weather is milder and speeds are a bit slower; this means they can use cheaper but heavier LFP battery chemistries while achieving sufficient real-world range without going far down the weight-cost spiral. Third, we can exclude several models like the BYD Seagull & Geely Xingyuan because they operate in a Chinese Kei-car-like cutout that allows for lower safety standards (cars under 4 meters in length). Additionally, there’s a much higher proportion of brands selling in the low-end segment in China (like Mitsubishi in the US) that are very cheap but aren’t suitable for the US market. Also, only 6 relevant Chinese automakers use their own in-house infotainment instead of Huawei’s (banned in the West), one of which is Xiaomi which isn’t sold in the US so we’re left with only 5.
When removing these factors, this still leaves Chinese automakers with several advantages:
1. Lower cost from mature supply chains, higher automation, cheaper labor
2. Lower cost from more advanced engineering (C2B battery packs, very large castings, etc)
3. Likely somewhat better specs & technology at the same price class, especially if they use the same high-end infotainment chips. This will mainly be in charging speed, power output, infotainment software*, and autonomous driving tech.
*Chinese route planning software seems pretty crappy, as charging stations are as plentiful as gas stations in most relevant areas.
So far, Western automakers are kind of keeping the gap steady as COVID era investments mature, but as new EV tech investments dry up the gap may widen in a few years.
Nothing like direct experience to change minds. If average folks need to baby step their way to full electric vehicles, do that. In 10 years full EV sales will be up. I bet that folks realize ICE is a giant hassle after finding out how much less maintenance the EV part of their car needs. Batteries should be better and cheaper by then to boot.
That reminds me: 15 years until we get the article from SWG about how an early Scout puked it’s ICE but is still fine to run on electric?
I like those sporty-looking Skoda wagons. Can’t believe American buyers gave up on that form factor. 🙁
I absolutely love wagons. But I recently went from car back to SUV and I don’t think I can ever give up the ride height again. If I get in a collision, I don’t want the bottom of a Silverado grill plowing through my face.
I enjoy the ride height thing just for ease of entry/exit and loading/unloading cargo, but I’ve got a bad back. Until a few months ago, my daily was a first-gen Volvo XC90, and I’m not gonna lie: the ride height, general comfort, and feeling of safety it provided were a big part of why I liked it so much. Then I bought a 36-year-old 240 wagon, and I like it a lot: it’s full of character and it’s reasonably comfortable too, but getting in/out is more of a chore, and the rear hatch is just a bit lower than I’d like, forcing me to stoop a bit under it.
In a fantasy universe where I had money/time/effort to burn, I’d get a good 2″ lift kit for it (costs roughly $2K to do it right from the several videos I’ve watched) but that’s not gonna happen. I might just wind up getting a younger (but still first-gen) XC90 at some point in the future, especially if my back gets worse. Or maybe a lightly used Mazda CX-5 or CX-9. I dunno… I’m not driving that much lately, so buying anything else seems unecessary at the moment…
I wonder if EVs will unintentionally fix these ergonomics problems; the typical skateboard chassis seems to force the floor of sedans/wagons to be a couple inches higher, which might be just enough height to help egress and not have to stoop underneath the hatch.
I remember liking In the Army Now as a kid, though I have a feeling I wouldn’t be able to stand it as an adult. Not sure if anyone has watched this movie in the last 25 years.
I don’t need to see it again. I still quote it regularly enough. Whenever it it applies while we are watching Jeopardy, the wife and I will look at each other and say “it’s got to be Chad”.
Glad I’m not the only person to remember this movie exists, lol.
There are more hybrid models available at lower price ranges ($20K to $40K) in the U.S. than PHEVs or BEVs, so it’s no wonder “demand” is increasing. What’s not being widely reported, is how the first part is supply, not demand.
What’s also not being widely reported is how much better to drive PHEVs/EREVs are than regular hybrids. In other words, a 2011 Volt is way more fun / punchy / inexpensive to own and operate than our 2021 Toyota hybrid. Our Toyota hybrid gets great MPG, but that’s about it.
Last, I agree with David Tracy. Despite their complexities, I think the EREVs / strong PHEVs could take off in the U.S.
I think this is going to be better than the Al Franken Decade.
I tend to agree with DT. I think that study undersells the magnitude of EREVs.
Currently the magnitude of EREVs is zero. I mean, there’s some promise there, but since the Volt (which has been dead for years) nobody has offered one. There are a number of them on the way, but nobody is sure if they’re going to be affordable enough to lure people away from regular hybrids.
I get DT’s enthusiasm for it, but I’m not sold until we can see a manufacturer offer one for regular folks in the next couple of years.
That’s the one from the alternate timeline where the prosecuting attorney from My Cousin Vinny was married to Ferris Bueller’s mom and their daughter was Carla Gugino.
I would rank Encino Man above Son in Law for the excellence of Brendan Fraser and despite the presence of Samwise Gamgee. 🙂 Nah, JK – he was all right
agree. I said below that Encino Man is likely the least bad of the Pauly Shore movies.
The presence of Carla Gugino alone makes that movie fantastic. Name a bad movie of hers. You couldn’t could you?
Toyota was right as usual.
IMHO, the best use of 300 miles of battery is putting 30 miles into 10 cars.
Yep, electrifying 10 (average) peoples’ commutes gains more benefit than one person’s commute.
It’s a pretty common idea in process improvement circles that a partial measure that can easily be applied across a wide range of things almost always nets more effective results than an ideal measure with a narrower scope.
I could do 90%+ of my trips, and 100% of the really inefficient short-short ones on electrons that way. But for me, that other 10% would be far too much of a pain to bother with an EV.
Sadly, nobody makes a hybrid I have any interest at all in buying. Volvo came close, but got stupid with it, and only sold it as a naff Polestar Edition for Mercedes wagon money in the US. Nope.
I’m with you. Myself and another commenter desperately want Toyota to hybridize the Corolla Hatch (yes, its a modest want) in the US market like they already have in Europe.
I just want a modestly powered proper station wagon PHEV. If Volvo had offered the equivalent of the basic S60 PHEV as a V70 at a commensurate price, there would probably be one in my driveway right now instead of a Mercedes wagon. But they only offered it as a Polestar with the stupid 400hp powertrain for nearly $75K. It’s a perfectly fine $50K car (what you could get the sedan for, even a bit less), but it’s not a $75K car. I have no interest in the jacked up V70XC, I am not compromising when spending real money.
But ultimately, every boring car should be at least a hybrid at this point, if not a plug-in. Even 10-15 miles of range could do a lot of good in the world.
That assumes a limited supply of batteries.
Nothing to add in the automotive realm, but man,what a great video! First time I’ve watched the whole November Rain video…
It was right about the peak of the music video as an art form (or at least of MTV). It all seemed to unravel from about that point.
Probably because of over the top, self-indulgent videos.
Certainly because of the internet.
Any increased consumer move to hybrids will cause an increase in moves to pure EVs. Just watch.
It will drive a combination of mindset change and increased demand, and subsequent supply of charging (since there will be in increase of PHEV’s as well).
I personally think a move to hybridization is well overdue and can work as well as, or better than any ICE application. The current state of BEV’s still leaves a not insignificant number of cases where the tradeoffs are deal breakers to some (this is referring to legitimate needs, not imaginary needs which fall under that mindset change thing).
My wife is 7 years into her 2nd Crosstrek and they just announced a bright green version (her favorite color) for next year, but only on the hybrid. We’re waiting for the local dealer to get some in stock so she can see the color in person but will probably be buying her first hybrid next year. On the other hand, I traded in my BRZ on a used Polestar 2 last month.
Yeah, we just want to be a part of the solution and not part of the problem 😉
REEV sounds a whole lot more marketable than REX. I’d much prefer a car that reeves than wrecks, although for movie buffs that still might not be the greatest acronym, as it’s not that big of a leap to “electric wheelchair”, courtesy of an unfortunate accident involving a one horse power motive device commanded by a famous actor.
I was thinking more of the reavers in Firefly.
That series (and Serenity) were great sci-fi. I so wish there were more than just 14 episodes.
That series is undeniable evidence that network executives are halfwits.
Someone needs to sit down with Hardibro and have a little discussion about his preference in movies. Why? Because his answer to best Pauly Shore movie is “Son in Law”. The problem is that this was a trick question. Why is it a trick question you might ask? The answer is simple.. there are no good Pauly Shore movies.
I subjected my kids to Biodome.
One was able to make it half-way before they couldn’t take it anymore.
But it hurt to admit that I had happily watched it when I was younger.
I get it… I’ve begrudgingly seen most of his films… some more than once. But the combo of him and Stephen Baldwin in Bio-Dome is just way too much for a mere mortal to bear.
Your second sentence is grounds for a visit from the child services.
Your third sentence tees up the not guilty by insanity verdict.
Concur. Off the top of my head, I’d say the least bad is probably Encino Man.
Nah, the correct answer here is a Goofy Movie.
I forgot about that one, you make a strong case…
Pauly Shore was one of those “moment in time” celebrities. His schtick worked in the 90’s but does not work now.
However, Son In Law was a pretty decent movie for the time and I would put it up against similar, modern movies within the same genre.
It was perfectly fine and most things that make Shore hard to take were toned down in the movie. Not that this is a hill to die on, but I can defend it.
Maybe it’s a generational thing but I enjoy Pauly Shore. We watch Son In Law every Thanksgiving but it’s not my favorite of his movies. That honor would have to go to Encino Man though Biodome is definitely in the running if for no other reason than they included a FNM song on the soundtrack.
Oh man, I loved Biodome and Encino Man as a kid. Wasn’t Brendan Fraser also in Encino Man?
Yes, Brendan Fraser was Encino Man!
Son in Law—–Kelly Kapowski as the “bad girl”. Yes, please. Also, Pauly Shore piloting a combine–COMEDIC GOLD!!!!
The 90’s were beyond the best…..
I miss hearing the cash register printing out the receipt.
Yes, decade of the hybrid, for sure. Up until the past few years it was an option you had to go for. Now increasingly your are getting a hybrid powertrain whether you want it or not. Really good for reliability I think, as the electrons can do the grunt work much more reliably than most high compression or boosted options. We’ll see!
In terms of trend / new kind of powertrain that hasn’t really been sold en masse yet I think it will be the decade of the EREV. Ever since the first Volt hit the market I’ve been wishing and hoping for a 100 to 150 mile PHEV and we are finally getting close!! But the current 4Xe debacle is not making those initial Stellantis units look very good at all…
With my non-hybrid 1.5T civic hatchback getting better than those numbers, primarily city, it makes me think there’s still some significant advantage to non-SUV bodystyles (and lower-drag drivetrains) to eke out additional fuel savings. I think less direct means of driving the wheels will become the norm with the ICE being further isolated.
But, with EPA rules relaxing (or gutted), and oil price averages matching those from the mid-00’s, there’s little to actually try to steer the US market for fuel efficiency except for automakers who have to compete with products outside of the US.
For most people, traditional and mild hybrids are likely where it’s at. For people with predominantly short trips, PHEVs can be hilariously good. Independents are starting to work on hybrids more, and I’ve flipped a few Priuses and Lexus RX hybrids, doing the swaps solo. I still run into one of the RX buyers: “Best car we’ve ever bought.”
I recommended a RAV4 Prime to someone years ago, and he lives at an apartment complex where he can plug it in for free. I had to recommend he put Sta-bil in before a tank if he’s not running through the tank often enough.
He’s been hovering between 175 and 190MPG since he got it, only putting in a tank every two to three months when he goes to visit family that lives further out. He also likes having torque for once. Electric motors democratize torque.
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I’ve no interest, but the new 911 Turbo S – which is a mild hybrid – I noticed having a fair number of benefits. No starter, no AC compressor, no alternator, no accessory belt. PDCC works better by having more energy to play with. Still needs a small, 12V battery along with the 1.9kW 400V pack, but there’s a lot of benefit despite some weight.
So much this.
IIRC new 991.2 Turbo S and GTS are not mild hybrid but full fat Hybrids given they have a 400V motor in the gearbox, as well as the E-Turbos. I don’t believe it uses much if anything that is 48V, but rather uses the 400V for the active chassis controls. It’s the same as the 3rd gen Panamera getting the crazy active chassis that requires the full hybrid to run.
Apparently this is correct. I looked at the 911s as “mild” simply because their higher voltage battery was genuinely the size of a normal car battery, but apparently only 48V systems are classified as “mild.”
It was nice to see they really were able to keep pack weight down. Though it’s still about 80kg over the 992.1. Turbo is intended to be the Porsche technology showcase, but at 3800+ lbs it’s genuinely getting too porky.
Decade of PUFFALUMP WORLD DOMINATION!
err, hybrids, probably
Hybrids seem to be the way of the short to medium term future for 2 reasons. First is they are a fairly mature technology, so most buyers are comfortable in picking up a hybrid to replace an ICE only car these days,. This is sometimes to their detriment (see Jeep 4xe), but generally speaking Hybrids tend to be Naturally Aspirated Atkinson cycle engines with a few motors which can often be less finnicky than a DI Turbo car.
The second reason I believe they will be the de-facto sales winner is price. PHEVs, EREVs and BEVs have inherent cost additions due to current battery pricing and the costs of implementation. Standard Hybrids get away with 1-3 kWh packs, while even the shortest ranged PHEVs on the market have north of a dozen kWh of capacity. Hybrids are quickly becoming the only option (Toyota) for drivetrain or the middle powertrain (Mazda, some Kia/Hyundai) that gets you a great blend of adequate power, increased efficiency, and a very minimal price bump, as well as often better residual values. All of these are things that cannot generally be said of BEVs and PHEVs.
Simply said, when times get increasingly uncertain, people begin to tighten the purse strings and go with less exciting, safer options. When incentives dry up, electricity or housing prices run up, and a car needs to be replaced, a reliable Hybrid is unsexy but cost effective over the relative unknowns of BEVs and the less efficient world of ICE vehicles. I will say that I suspect PHEVs and EREVs will continue to gain market share over the next 3-5 years. As they become more ubiquitous and economies of scale are realized they will become more cost competitive, but Hybrids are a way to quickly reduce emissions for Euro 7 emissions threatened cars (see 911) at a minor COGS increase.
I feel like most non-US based manufacturers will continue to keep their products compliant to their home markets. Meaning that their models will be driven by things like Euro7+, EV mandates, engine-sizes, etc…
It does leave the US more isolated with their local brands building hyper-focused vehicles that have limited sales internationally.
Even, on footprint alone, an F150 in Japan is absurd, the overall scale of everything on that vehicle (engine, fuel consumption, wheel size, bumper heights, headlight height, etc…) means that it would never become a commercially viable venture to export for more than reasons of appearances. With Stellantis wanting to make RAM SUVs, are we in for a future of the HummerH2-part-deux (where the HummerEV is laughably too large for many international driver’s licenses to have on the road without a commercial license in their home countries)?
I agree on the international brands focus. It seems very likely that brands have begun to harmonize their global products to the most restrictive standards they have to meet, such as Porsche and the 911 having more hybridized models every year. There are obvious exceptions such as USDM cars not getting the Gasoline Particulate Filters many EU market cars get, simply because a resonator or tube is cheaper than a filter. But generally speaking, modern ICE engines are so expensive to develop, they need to apply to all market to be justifiable.
To go off the US market example, Stellantis is bringing back the Hemi and Hellcat simply because they can, but I struggle to see a reality where they do much more development on a Hemi-replacement OHV V8 of some sort. As long as a platform can accommodate and already developed powertrain, regional variants are not a big deal, such as the theoretical H2 and Ram SUV, but with ever stricter safety regs, doing a new body style for just the North American or only US market gets prohibitively expensive.
Gasoline particulate filters are coming to the USA with EPA Tier 4. Some vehicles like the Ecoboost Maverick already have them.
I think people’s learning curves will keep the traditional hybrid on top for a while yet.
People like my parents, who shopped multiple propulsion types, and who wanted something efficient, eventually settled on a pair of regular Toyota hybrids because it was the least disruptive to their lives and routines. They still fill up with gas, just half as often as before. They didn’t have to install chargers in their garage, they didn’t need to change how they approach a road trip, they didn’t have to gamble on anything unproven (they were initially interested in a 4xe JGC until reading reviews).
There are plenty of people willing to make the changes to accommodate a vehicle you have to plug in, and the number is growing, but maybe not fast enough for a radical reimagining of the vehicle fleet in just a few years.
this definitely applies to a lot of people. some could argue it’s being “dumbed down” but I think it mostly is for all the people who just don’t want to have to think about the extra steps. Car goes. At some point car needs to eat. Easy to find a gas station. There’s a comfort zone there.
my only experience with anything non ICE was a 5 day rental hybrid camry last summer. Your description is spot on. I couldn’t tell anything was different other than I drove more than I expected to before needing to stop for gas. zero compromises or intrusion into my thought process. I liked that.
And that’s what people have needed to embrace electrification. It’s shocking how many people have no idea that PHEVs/hybrids won’t leave you stranded with a dead battery and don’t require 45 minute charges (there are very specific reasons these beliefs persist, I’m just not going to go there). They can be driven just like a “normal” car.
Also, we aren’t taking about new technology; hybrids have been on the market for 26 years…
yup. it’s not something new or that requires different behavior. So it really can work for many people without having to do any of the extra thinking (or expense) that comes with an EV.
I have a close friend that was very against any type of electrification. Eventually he gave it a try to the Sienna Hybrid and they loved the car for the MPG and practicality. Very against electric cars too but somehow he ended up with an Equinox EV and he loves the car. Its a learning curve like you said, when you move one inch closer, the next question is, what if I go full electric?
I think people eventually will go full electric but when or how? Trucks will be the last one for sure to rise in high numbers of sales.
For a lot of people (most?), it’s a decision driven by cost.
Even if you can show them it’ll save them money over the long term: they can’t afford the near-term to get there.
And in the inverse, too. Friend of mine was in the market for a new Honda suv. Wanted a CR-V, ended up with a Prologue due to better terms. In the monthly budget the EV was the way to go based on nothing more than the amount of the car payment!
Agree on trucks. Not starting with PHEV in full-size trucks and SUVs and instead going with full BEV was a major product planning mistake.
That never made sense to me. The specific demands full-sized trucks are built for (high torque, long range, efficient cruising, etc.) seem tailor made for hybrid drivetrains.
To be fair, GM and Chrysler BOTH made hybrid trucks/SUVs, albeit not plug-in hybrids. And they didn’t sell at the time, because people were a bit too stupid to realize what an accomplishment it actually was to get a full-size, full capability truck/SUV up to 25mpg in the city from the real-world 15-16 that they got at the time (and often still do). Because mpg is a dumb way to measure efficiency, it didn’t seem like much of an accomplishment, and of course, they priced them very high.