Looking at the numbers, electric cars are selling better in Europe than plug in hybrids. 58,244 electric cars were sold in the EU in 2014 — a 73% increase over 2013. By contrast, plug in hybrids only managed 30,647 sales in 2014, a 25% increase. But according to IHS Automotive, an industry research organization, plug in hybrid sales will top 1.35 million worldwide by 2020 while electric cars will stay below 1 million units. By 2025, IHS expects plug in hybrids to surge to 2.7 million units a year.
“By 2015 or 2016, we will actually see an inflection point where global plug-in hybrid production overtakes that of electric vehicles,” said Ben Scott, senior analyst at IHS Automotive.
Why is that? Mostly because Europe’s primary car makers like Audi, BMW, Mercedes and Volkswagen are expected to bring a barrage of new plug in hybrid models to market in the next few years. Audi and Volkswagen in particular have announced they intend to offer a plug in hybrid version of every car they sell.
According to Automotive News Europe, all manufacturers are up against a deadline imposed by the European Union to sharply lower carbon dioxide emissions by 2020. The regulations get even more stringent by 2025. Car makers simply cannot hope to comply unless they take drastic measures to add cars with ultra low emissions to their product mix. Most have decided that battery electric cars are simply too expensive to meet the needs of the marketplace.
Unlike Tesla, which is building 50,000 cars a year, the world’s auto makers need to sell millions upon millions of cars every year to stay in business. The electric cars that people can afford are too down market for buyers’ tastes and the cars that people want are too expensive if they are powered only by a battery. The European car companies see plug in hybrids as their only way out of the box regulators have put them in.
Add in that plug in hybrids don’t require any expensive infrastructure improvements like electric cars do and you have a business case that clearly favors plug in hybrids over electric cars. That may not be what some people want to hear. Everyone is waiting for the big car companies to build cars that will wipe the smirk off Elon Musk’s face. But until the price of batteries falls — and falls a lot — that just isn’t going to happen.