National Post

GM UNPLUGS THE VOLT BUT ELECTRIC VEHICLES ARE FAR FROM DEAD.

- Liam Denning

Farewell Chevy Volt, we hardly knew ye. General

Motors Co.’s award-winning plug-in hybrid electric vehicle (PHEV), launched in 2010 as the company was emerging from bankruptcy, is one of the models being ditched as part of sweeping cutbacks GM announced Monday.

As one of the relatively few plug-in car options available in the U.S., and a symbol of GM’s shift toward new technologi­es, the Volt’s impending demise is a blow to proponents of vehicle electrific­ation. Yet on the face of it, it seems like more of a ding than a total crash.

As the name implies, PHEVs are a compromise, twinning a regular drivetrain with an electric one to offer zero-tailpipe emissions for relatively short distances and the comfort of having a traditiona­l engine kick in for longer journeys. That makes the Volt, and others like it, a feat of engineerin­g but also a halfway house; drivers pay more upfront (before subsidies) for just a partly electrifie­d experience.

This makes the long-term future of PHEVs vulnerable on three fronts:

As tax credits roll off or get cut, the premium of PHEV sticker prices over traditiona­l vehicles widens. If oil prices fall, then the cost savings on fuelling — an important offset to the sticker price — shrink. As battery costs continue to fall, and charging infrastruc­ture gets built, fully electric vehicles become the more obvious choice in many markets.

The first is an impending reality in the U.S. — barring any legislativ­e changes — and already the case in important growth markets such as China and India, where subsidies for PHEVs are smaller than for many fully electric vehicles. The second is a chronic issue that happens to be on full display amid the recent slide in oil prices.

The third is the biggest issue for the long term. As and when battery costs fall low enough, their range and price would become comparable to those of traditiona­l vehicles. At that point, the market for a car combining both drivetrain­s ought to become quite niche indeed. “Plug-in hybrids are not dead, but pure electrics are grabbing a much larger share of the plug-in market as the technology improves and costs fall,” says Colin McKerrache­r, who manages transport-sector coverage for Bloomberg NEF.

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