Global automakers are ramping up investment in hybrid technologies as growing consumer wariness of all-electric vehicles forces the industry to downshift.
A combination of still-high interest rates and concerns about inadequate charging infrastructure has cooled customer enthusiasm for fully electric cars. At the same time, sales of hybrid vehicles are experiencing a boom, even though the majority of the industry has long considered this to be only a temporary solution. Executives from General Motors, Nissan, Hyundai, Volkswagen and Ford said at the “Future of the Car Summit” that capitalizing on the resurgent demand for hybrids is a priority. “We need to invest heavily in the future of plug-in hybrids” – said General Motors President Mark Reuss. “We have to be agile. We have a global toolbox of technical tools that we can deploy relatively quickly”.
Hyundai’s global president José Muoz shared that view, and the company is now considering making hybrids at its new $7.6 billion plant in Georgia as more motorists shy away from buying fully electric vehicles. “If you had asked me six months ago, or even a year ago, I would have said that the future is all electric,” Muoz said. “A lot has happened since then. Electric is still the future, but now we see a longer transition.” Electric car sales growth slowed in Europe and the United States last year, prompting automakers to offer discounts. Industry leaders have already acknowledged that the market has lost momentum as future sales growth increasingly depends on demand from mainstream buyers rather than early adopters.
At the same time, there were concerns that governments might backtrack on previous plans to force a rapid transition away from gasoline-powered cars. Ford’s European boss, Martin Sander, said the pace of the transition in Europe “depends on consumers” and that the American group is ready to continue selling hybrid models for the next decade. “We want to make sure we design our business model to be flexible enough” to respond to changes in demand, Sander said at the summit. “Our whole business and life cycle planning has become much more dynamic.”
The American rival General Motors – which largely removed plug-in hybrids from its range – announced in January that it would reintroduce the technology. The growing hesitance of consumers comes at a time when automakers in Europe see a growing threat from Chinese manufacturers introducing cheaper electric vehicles. To remain competitive in China, Peugeot needs to remain “agile” to avoid becoming embroiled in a price war, said Linda Jackson, the company’s chief executive. “We hold our own, but the Chinese market is the largest car market in the world, so it’s very difficult for a global manufacturer not to be present,” Jackson said.
According to Schmidt Automotive Research, Chinese brands like BYD and China-made Polestar accounted for nearly 10 percent of the all-electric cars sold in Western Europe in March. This is up from just over 4 percent two years ago. “We see more and more competition from Chinese brands and other tech worlds,” Nissan CEO Makoto Uchida said at the summit. The threat from Chinese companies has only increased automakers’ focus on hybrids, which typically have double-digit profit margins on the often unprofitable fully versus electric cars.
For many automakers, the slower shift allows them to continue squeezing profits from traditional engines while providing more financial firepower to develop electric vehicle technology. Most of the industry still believes that the development of profitable all-electric cars is the most important long-term goal. In recent years, Toyota has been the biggest champion of hybrids, and earlier this week they announced that they plan to increase their spending on new technologies by more than 40 percent, after hybrid sales led to a record profit for the group last year.
Source: sg.hu
