As Tesla's home turf, the rapid rise in hybrid car sales has become a distinctive feature of the U.S. auto market in recent times. According to a report by Morgan Stanley, in February, sales of hybrid vehicles in the United States grew five times faster than electric vehicles.
At the same time, automakers and parts suppliers in the U.S. market are also responding to growing consumer demand by increasing production capacity for gasoline-electric hybrid vehicles and plug-in hybrid vehicles. Prior to this, traditional American car companies, including GM and Ford, are planning to phase out hybrid technology, learn from Tesla, and transform into a pure electric vehicle manufacturer.
Electric vehicles are quite limited in the United States
Like China, the United States is also geographically vast. As a result, China and the United States, like Europe, will face more constraints from external factors.
The limited range and imperfect charging facilities make consumers have a lot of range anxiety. In the domestic market, even if the range of electric vehicles can reach 1,000 kilometers, it is still difficult to completely dispel people's concerns. Not to mention that electric vehicles are not very competitive in the second-hand car market, and the value retention rate is much lower than that of fuel vehicles.
These will offset the advantages of electric vehicles in terms of electricity prices and maintenance costs, and the price of oil is inherently cheap in the United States.
In addition, with the U.S. inflation data still at a high level, the vast majority of ordinary consumers do not have much enthusiasm for higher-priced electric vehicles.
In this case, Tesla's rapid rise in the United States is more about Musk's own aura and the functions and configurations that Tesla's models can bring that are completely different from many traditional fuel vehicles. But Tesla's higher price makes most of the people who buy Tesla affluent.
For most ordinary Americans, more practical fuel-powered pickups and SUVs are better choices. Not to mention, the cost of hybrid systems is rapidly decreasing as production scales up.
Toyota, for example, has seen the price difference between its hybrid and gasoline models drop from $6,000 to $7,000 in the past to $1,500-$2,000 now. In fact, the excess cost is easy to earn back the difference in the price of the vehicle in a short period of time through the later fuel saving.
Major automakers are rapidly increasing the production of hybrid models
From the perspective of car companies, the sales of hybrid vehicles are also rising rapidly.
As a traditional American auto giant, the plug-in hybrid version of Stellantis' Jeep Wrangler model accounted for half of the model's total sales in the United States in the second half of 2023. Demand for Ford's Maverick trucks was even stronger, boosting sales of Ford's hybrid vehicles by nearly 37 percent.
As a traditional gasoline-electric hybrid car company, Toyota's year-to-date hybrid car sales have increased from 29% last year to 37%, and Toyota expects that the sales of hybrid vehicles will account for 45% of total sales this year. Based on optimistic estimates of the hybrid market, the next-generation Camry sedan launched in the U.S. will only be available in a hybrid version.
As for Europe, Volkswagen, which is all-in all-electric, is also considering the introduction of plug-in hybrid vehicles in North America while rapidly launching electric vehicles, and the Tiguan, a PHEV version that has just been launched in Europe, may be quickly introduced to the U.S. market. This plug-in hybrid model, which is based on the MQB upgraded platform, has an all-electric range of nearly 100 kilometers. Once introduced into the North American market, it still has a certain competitiveness.
In fact, not only vehicle companies, but also parts companies are increasing the production capacity of hybrid system parts. Schaeffler, for example, plans to invest an additional $230 million in its Ohio plant to increase production of electric shafts for hybrid drive systems. Correspondingly, the hybrid version of the Ford F-150 Raptor using Schaeffler's electric axle currently accounts for 20% of sales, far exceeding previous market expectations.
What are the implications of full electrification?
At present, for car companies other than Tesla in the U.S. market, they need to not only think about consumer needs and technical feasibility, but also consider the direction of policy, especially since 2024 is an election year in the United States.
The Democratic administration, led by Biden, has given great support to electric vehicles. The U.S. government even plans to release carbon emissions targets for cars this month, in a bid to push automakers to increase the share of battery electric vehicles to 60% by 2030.
But the Republican Party, led by Trump, is not so resolute in its EV strategy. Until the policy is further clarified, it is more prudent and safe for traditional car companies to use hybrid technology to reduce carbon emissions.
For Chinese automakers, the door to the U.S. market has not been opened. Whether it is from the tariff level or from the level of regulations such as ICTS, it is difficult for Chinese cars to enter the US market.
But in a recent public speech, Trump said he would still be willing to give Chinese automakers a chance if they were willing to set up factories in the United States and hire local American workers instead of sending workers from China.
In other words, if this policy can be implemented in the future, there is a high probability that Chinese car companies will also have opportunities in the US market. At that time, we could introduce domestic plug-in hybrid technology to the U.S. market.
Unlike European PHEVs, which are mainly based on engines and supplemented by electric motors, domestic plug-in hybrid technology is based on electric motors, supplemented by engines, and a large battery pack is laid on the chassis, with a pure electric range of more than 100 kilometers. In this case, domestic plug-in hybrid models will also have a place in the U.S. market.