Global EV sales continue to increase, but Plug-in Hybrid momentum is growing

PHEVs make a lot of sense for traditional automakers faced with battery-powered losses

Global passenger electric vehicle (EV) sales have continued to grow. However, plug-in hybrid electric vehicle (PHEV) sales have significantly increased year-on-year, leaving their battery-only counterparts trailing.

According to figures from Counterpoint, PHEV sales significantly rose in the first quarter of 2024, with a 46 percent year-on-year growth. Battery Electric Vehicles (BEV) registered just seven percent growth.

The shift will alarm some – Greenpeace memorably described PHEVs as "the car industry's 'wolf in sheep's clothing'" thanks to their relatively limited battery-only range, and greater weight.

That said, there are plenty of issues with BEVs to put customers off. Counterpoint Research analyst Abhik Mukherjee said: "The cheaper upfront cost of PHEVs when compared to BEVs and the availability of a fuel tank that eliminates range anxiety were among the main reasons for high PHEV demand."

There is also the issue of charging a BEV. In a country like the UK, customers without off-street parking must first find a working charge point and be prepared to navigate an often complex – and expensive – array of options to charge their battery.

Overall EV (BEV+PHEV) sales grew by 18 percent year-on-year, with China being the clear leader with a 28 percent uptick. Growth in the US was considerably more modest, with two percent overall growth recorded and a three percent drop in BEV sales.

Along with their challenges in charging infrastructure, BEVs remain expensive. While companies such as Tesla can reduce their costs, others have found themselves facing significant losses in order to remain competitive. Ford recently announced it would rethink its EV strategy amid losses and delays.

All of this makes PHEVs rather attractive to traditional automakers in the short term. Counterpoint Research noted: "The increased adoption of PHEVs is expected to continue until these automakers develop strategies to reduce BEV manufacturing costs and meet emission targets to avoid fines."

The EV market is in an interesting place at the moment. Early adopters are tailing off, while many customers struggle to see the benefit of a BEV compared to the aggravation and cost of owning one.

Counterpoint Research associate director Liz Lee said, "In 2024, the EV market is poised for significant growth, yet signs of a slowdown also loom and the annual growth may dip below 20 percent.

"The leveling off of early-adopter interest suggests a shift in consumer dynamics to the mass market in the long term and a new phase of evolution for the EV industry." ®

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