Crucial role seen for hybrid vehicles
In the transition away from combustion engines toward electric transportation, dual power will be needed to bridge the gap
A similar revolution might be brewing among industrial users, too, as logistics operators realize the efficiency and cost savings involved with electric delivery vehicles. With the size of this fleet growing by 20 percent a year and more growth expected for the e-commerce sector, it’s not unimaginable to see mass adoption spreading to the likes of garbage trucks and construction vehicles.
Just as encouraging is the adoption of PHEVs among Chinese consumers, a trend that saw a 45 percent year-on-year increase in 2016 and an 87 percent year-on-year increase in 2017. What began as a nascent interest in a handful of cities spread to more than 200 cities in just a year.
The popularity of PHEVs stems from their excellent performance and functionality.
BYD believes PHEVs qualify for official support, as they meet the requirements of the dual-credit policy (average fuel consumption points plus output of new energy vehicles), a plan that was implemented in April that is expected to guide automobile manufacturers toward improving the quality of new energy vehicles and ensuring the entire sector’s sustainability.
The driving range of PHEVs meets market expectations and can potentially mitigate the blow that the new energy vehicle sector may receive as official subsidies decline. Moreover, PHEVs are a boon for power grid companies, engine factories, battery manufacturers and motor plants.
More important, PHEVs act as a transition medium as the country builds the charging infrastructure necessary to make electric vehicles the norm. Put simply, PHEVs are needed to fill the market gap.
In Europe, sales of new energy vehicles reached 259,000 last year. The ratio of pure electric to PHEVs was close to 1-to-1, even with small proportions of vehicles in A0 (subcompact) and A00 (smaller) classes. Sales in the United States were 195,200, with 53 percent being pure electric and 47 percent being PHEV, with A class (compact) vehicles accounting for at least 92 percent.
Sales of PHEVs in China were influenced by policies. With China entering the post-subsidy era, as policies are tightened to decrease subsidies, and with the impact of the dual-credit policy, market demand is expected to play a major role in development of new energy vehicles.
PHEVs account for roughly 18 percent of China’s new energy vehicle market, with pure electric vehicles (including A00 class) making up the rest. If we exclude A00 vehicles from the pure electric segment, however, it leaves only vehicles of A0 class or above, of which PHEVs account for 47 percent. We exclude A00 vehicles as, based on the growth trend of traditional combustion engine vehicles, their proportion will be very small. Therefore, we can conclude that PHEVs remain the mainstream of global consumer vehicle development.