LONDON v BRUSSELS (Reuters) – Remember when plug-in hybrid cars were the technology of choice for the climate-conscious driver? They do not appear to be good for the environment, according to experts, and could be phased out by carmakers in the face of tougher European rules.
EU policy plans for plug-in hybrid vehicles (PHEVs), which contain an electric battery and a combustion engine, could mean that the “transition” technology has a shorter lifespan than some car manufacturers. reputation.
Draft regulations on green financing would prohibit producers from labeling them as “sustainable investments” after 2025, which could discourage investors. In the meantime, planned rules on pollutant emissions, such as nitrogen oxides, could increase the cost of producing these cars.
The aim of these reforms is to accelerate the transition to fully electric vehicles and to achieve climate goals. However, they would mark a shift from existing EU policies, such as CO2 standards, which have treated hybrids in the same way as fully electric cars and helped stimulate the car industry to invest tens of billions of euros in technology.
Some carmakers had considered selling hybrids until at least the end of this decade as a bridge for full-battery electric vehicles (BEVs) – although their shift from technology appears to be underway.
An analysis of car production plans in Europe by 2028, compiled for Reuters by AutoForecast Solutions (AFS), which tracks industry production plans, shows only 28 PHEV models compared to 86 BEV models. This is a change for an industry where PHEV models on the market have exceeded the number of BEV models each year since 2015, often significantly.
Now, some carmakers fear that the EU could reduce this transition prematurely. They warn that future rules could make it difficult to sell PHEVs on European markets in just a few years, despite consumer concerns about the range of fully electric cars and the lack of charging infrastructure.
“It’s crazy to do this by 2025, because today you’re effectively killing demand,” said Adrian Hallmark, CEO of British luxury carmaker Bentley, a Volkswagen unit, referring to proposals not to classify. PHEVs as sustainable investments. He plans to sell PHEV by 2030 before it becomes fully electric.
“For most people, a battery-powered electric car is not yet practical,” he told Reuters.
A European Commission official declined to comment specifically on the rules on green financing, but said its policies are “technology neutral”, adding that PHEVs are “a technology of transition to zero-emission mobility”. . To achieve a global goal of climate neutrality by 2050, almost all cars on the road must have zero emissions by then, the Commission added.
The rules, which are still being drafted, come against a background of a shift in the position of leading environmental groups pushing to dissipate green PHEV accreditations and eliminate their subsidies.
A study by the International Council on Clean Transport in September last year said that PHEV’s fuel consumption and CO2 emissions are up to four times the level for which they are approved because people do not charge them often enough.
Julia Poliscanova, senior director for vehicles and e-mobility at the European NGO Transport & Environment, said her own research showed that when driven in combustion engine mode, CO2 emissions from hybrids were higher than conventional cars – they are heavier than combustion – only cars used more fuel.
“From an environmental and climate perspective, today’s plug-in hybrid technology is worse than its replacement.”
This is a change in the group’s position in 2018, when it saw PHEVs as a transition technology.
“GREAT CONSUMPTION”
The manufacturers say that hybrids, used correctly with electricity as the primary source of energy and combustion as a reserve, emit much less than conventional cars. They add that PHEVs are a transiently popular choice for consumers who want greener travel.
PHEV sales in the EU tripled to 507,000 vehicles in 2020, almost as many as the nearly 539,000 fully electric vehicles sold.
Evaluating car manufacturers’ investments in PHEV is difficult, as they only announce broad “electrification” plans. AlixPartners Consulting estimates that automakers and suppliers will invest $ 200 billion in electrification from 2020 to 2024.
German engineers FEV estimate that installing a battery, engine and electronic components in a combustion engine car to produce a PHEV costs up to 4,000 euros ($ 4,700) per vehicle.
European carmakers are sharing whether they will fight for PHEVs or spend their financial and political capital by accelerating the jump to fully electric vehicles and pushing for better charging infrastructure across the continent.
Stephan Neugebauer, president of the European Green Vehicle Initiative, told Reuters that technological improvements would mean that future PHEVs would rely less on their combustion engines, making them suitable for the green transition in the next decade and beyond.
“Will all customers buy electric vehicles with batteries in 10 years or nine years? We don’t believe it, ”said Neugebauer, who is also BMW’s director of global research cooperation.
“Why? Because sometimes you have to travel a long way, you go on vacation, you have to pull a trailer. And for that, you need public loading infrastructure. And that will continue to be a critical issue.”
BMW and Renault SA, which have not set a date to go fully electric, are among the companies firmly in the hybrid camp.
BMW boss Oliver Zipse said last month that they are “a consumer product” and that there will be a market for them even without subsidies. Renault CEO Luca de Meo said in February that PHEVs “will be an easy part of the landscape for the next 10 years” and are more profitable than conventional cars.
Volvo Cars CEO Håkan Samuelsson told Reuters: “It’s a bit disappointing that they (the political decision-makers in Brussels) don’t see the value of a plug-in hybrid.” But he said his company, which aims to be fully electric by 2030, is focusing more on pushing the EU to get member states to invest heavily in charging infrastructure.
“If we invest in the automotive industry in electric cars and we do this very quickly, I think our credibility to ask for investment in the charging network increases,” he said.
“LIMIT OF WHAT TO BE ACHIEVED”
The European Commission is to propose at least a dozen pieces of legislation to reduce emissions in all sectors this year.
Current EU sustainable taxation projects, a list of economic activities that, starting next year, will determine what can be traded as a sustainable investment, exclude the manufacture of PHEV from 2026.
This could discourage the army of investors seeking assets with green credentials. It could also restrict public funding if governments move to align their spending with the taxonomy.
While many countries still subsidize PHEVs, the Netherlands reduced their tax cuts in 2016. By 2020, eight times more BEVs were sold in the country than PHEVs, compared to four times as much. more PHEVs than BEVs four years earlier, showing how the government’s vehicle technology policy can have a major effect on consumer behavior.
A consortium of researchers, led by the EU and known as CLOVE, recommended this month that the so-called Euro 7 rules limit the emissions limits of motor vehicles to pollutants, including nitrogen oxides and carbon monoxide from 2025. Its recommendations do not are mandatory, but aim to inform the European Commission’s proposals, which will be presented later this year.
Transport and the Environment, part of the Commission’s expert group working on standards, said the proposals would force carmakers to equip PHEVs with expensive technology to reduce emissions from their combustion engines.
Hildegard Mueller, president of the German car industry association VDA, said the proposals were “at the limit of what is technologically feasible”.
“However, we must be very careful that the internal combustion engine is not impossible for Euro 7,” she said.
($ 1 = € 0.8503)
Reporting by Nick Carey in London and Kate Abnett in Brussels; Additional reporting by Costas Pitas in London and Joe White in Detroit; Edited by Pravin Char