As the apprehension among customers regarding fully electric vehicles (EVs) rises, auto manufacturers all over the world are enhancing their investments in hybrid technologies. High interest rates and apprehension about an unimpressive charging structure are discouraging potential EV buyers, leading to a resurgence in sales of hybrid vehicles. Up until recently, these were only viewed as a quick fix by most in the industry.
In light of the present circumstances, a decline of 14.2% has been recorded in Ireland’s new electric car sales in the first quarter, despite an overall market growth of 8% compared to last year. Top executives from Hyundai, Ford, Nissan, General Motors, and Volkswagen have prioritised capitalising on the increasing hybrid demand, as revealed at the Financial Times’ Future of the Car Summit.
According to General Motors’ President Mark Reuss, the company needs to invest significantly in the future of plug-in hybrids. He added that the company needed to act quickly and that they have a global array of technological resources ready for quick deployment.
Echoing this sentiment was Hyundai’s Global President José Muñoz. He divulged that although he would have advocated firmly for EVs six months or a year ago, recent developments have caused a shift in perspective. While recognising that EVs will still constitute the future, he acknowledged that the transition period may be more extended than initially expected, due to drivers’ hesitation towards fully electric vehicles.
Moreover, there’s been a noticeable slowdown in the sale of electric vehicles in Europe and the US last year, compelling car manufacturers to offer discounted prices. Industry executives admit losing momentum due to reliance on demand from regular buyers rather than early adopters. Concurrently, concerns about potential government retractions on prior plans to transition quickly away from petrol-based cars are on the rise.
Martin Sander, the European head of Ford, stated that the rate of the shift towards electric vehicles in Europe is guided by consumer behaviour, adding that the American company is ready to continue marketing hybrid models into the next decade. He underscored the need for a flexible business model to adapt to demand changes, stating that their business and life cycle planning is more dynamic presently.
In contrast, General Motors, another US competitor, which previously phased out most of its plug-in hybrids, declared plans to re-launch the technology earlier this year.
This development comes amid rising consumer caution and a concurrent surge in competition from Chinese manufacturers producing less expensive electric vehicles for both domestic and European markets.
In order to stay competitive, French automobile manufacturer Peugeot must remain flexible to prevent being swept up in China’s price war, said company’s CEO Linda Jackson. She stressed the difficulty of avoiding the Chinese market, which is the largest automotive market in the world.
Research by Schmidt Automotive has revealed that nearly 10% of all fully electric cars registered in Western Europe in March are manufactured by Chinese brands, including BYD and Polestar, which represents a jump from slightly over 4% two years prior.
Nissan’s CEO, Makoto Uchida, highlighted a competitive increase from Chinese manufacturers. Subsequently, more focus has been put on hybrids that normally have doubled-profit margins compared to fully electric vehicles that often report losses.
Many automobile manufacturers believe that a slower transition towards electric vehicles will enable them to continue reaping profits from conventional engines while simultaneously investing in the development of electric vehicle technology.
Most of the industry still views the creation of profit-making fully electric cars as the primary long-term objective.
Lastly, Toyota, the leading promoter of hybrids in recent years, expressed its plan to increase spending on new technologies by over 40%, owing to record-breaking profits driven by hybrid sales the previous year.