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Shift newsletter

Hybrids make a comeback amid doubts over EV demand

As consumers pinch pennies and auto executives worry about EV demand, some are giving hybrids a second look. 

It may seem surprising, amid headlines declaring that environmentalists now “hate” hybrids and studies that the emissions from hybrids are actually higher than manufacturer specs.

So are hybrids an outdated technology, or do they still have a role in the EV transition?

Shift newsletter

Hybrids make a comeback amid doubts over EV demand

Like velour tracksuits and the Black Eyed Peas, they were big in the ‘00s. Do they still have a role to play?

By Anita Balakrishnan
The four members of the musical group the Black Eyed Peas pose onstage with a red Honda Civic Hybrid car.
The Black Eyed Peas pose with a customized Honda Civic Hybrid in Torrance, Calif., in January 2006. From left are apl.de.ap, Taboo, will.i.am and Fergie. Photo: AP Photo/Reed Saxon
Nov 30, 2023
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As consumers pinch pennies and auto executives worry about EV demand, some are giving hybrids a second look. 

It may seem surprising, amid headlines declaring that environmentalists now “hate” hybrids and studies that the emissions from hybrids are actually higher than manufacturer specs.

So are hybrids an outdated technology, or do they still have a role in the EV transition?

What’s happening: Ford said in September that it planned to double production of hybrid F-150s amid projections that non-EVs may stick around longer than expected. Honda is bringing back the Civic hybrid, with a sedan model that will be built in Ontario. Even China, an early EV adopter, has seen hybrids undercutting pure EV prices and gaining popularity.

By the numbers: Consumers generally say they are more open to purchasing hybrids than EVs. In Canada, hybrid electric vehicles represented 11.6 per cent of new-vehicle registrations in the third quarter, with another 3.2 per cent being plug-in hybrids. Battery-electric vehicles are at 10.1 per cent—which, to be clear, is a new record in its own right, particularly given the meagre market share EVs had just a few years ago.

Some analysts see hybrid sales continuing to grow alongside EV sales for the next few years, but not all agree. RBC analysts wrote in a recent research note last week that plug-in hybrid vehicles “are ultimately a transition technology,” forecasting their sales will peak around 2030, and that present pressures on the pure EV sector are a blip. 

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“If you look at the sales trends, most consumers seem to be kind of just skipping over these plug-in hybrids all together and going straight toward full battery-electric vehicles,” said Joanna Kyriazis, director of public affairs at Clean Energy Canada. “Battery-electric vehicles are seeing more exponential growth in sales.” 

Not all hybrids are created equal: Plug-in hybrids can run entirely on electricity for short trips, meaning emissions vary widely depending on consumer behaviour. Several hybrid technologies use electric components to make fuel consumption much more efficient, but still burn gas. Natural Resources Canada classifies one plug-in hybrid, the Chrysler Pacifica Hybrid minivan, as the most fuel-efficient EV in its class. Many other hybrids are considered among fuel-efficient but “conventional” vehicles.

Canada’s grid is mostly clean enough to make EVs the greener choice: Daniel Posen, a Canada research chair and associate professor at the University of Toronto who studies transportation life cycles, said EVs are now typically the most environmentally friendly approach other than not driving at all. Very small, efficient hybrids can sometimes outpace EVs in places with carbon-intensive grids, he said, but most places in Canada wouldn’t meet that criterion. 

A driver who primarily takes very short trips, say 20 kilometres a day, could potentially run a plug-in hybrid only in electric mode, he said. If a small hybrid battery is sufficient, it could mean cutting down consumption of excess battery metals, he noted—though even then, one cross-country road trip in gas mode could quickly change the pollution equation. 

Affordability is more complicated than sticker price: While some hybrids can be cheaper than EVs, Kyriazis noted that plug-in hybrids present both the challenges of finding a charger alongside the steeper costs of maintaining an internal combustion engine. Pure EVs and longer-range plug-in hybrids qualify for a $5,000 federal rebate through the iZEV program, while shorter-range PHEVs only get $2,500, and other hybrids aren’t eligible at all.

Meanwhile, Clean Energy Canada found that most EV models now break even in cost compared to gas vehicles within a year, and could save drivers tens of thousands of dollars over the life of the car. 

The takeaway: “I think some people believe that [hybrids are] going to be playing a role in helping more hesitant Canadians go electric, because they have that backup gas tank,” Kyriazis said. “Both of those hybrid options offer incremental climate benefits. But we’re at the point now where we really need to stop tinkering around the edges, and we need to help more Canadians go electric.” 

Read Shift—The Logic’s authoritative weekly newsletter on automotive technology industry news—for more; and if you know someone who should be reading it, they can sign up here.

#climate #electric vehicles #markets #Tech #The Logic's Shift

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The four members of the musical group the Black Eyed Peas pose onstage with a red Honda Civic Hybrid car.

Photo: AP Photo/Reed Saxon

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