Page 2: The decline of plug-in hybrids

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Plug-in hybrids are worth less: they are only credited with a factor of 0.3. So if, for example, a manufacturer allows 17 percent electric cars and 20 percent PHEVs, the latter would only count as six percent. The sum of 17 plus 6 = 23 percent would in turn be lower than 25 percent, so there would be no advantage.

PHEVs also lose importance in the CO₂ fleet mechanism due to the so-called utility factor (UF). Put simply, the formal CO₂ value increases even if the electric range increases. Two adjustments to the UF are planned, which will probably lead to a devaluation of plug-in hybrids for the CO₂ limits by 2030. Because it will gradually become cheaper for the car industry to produce electric cars, PHEVs will be a marginal phenomenon by the end of the decade, as things stand today.

Pooling is allowed

Pooling is an option that is rarely used by the automotive industry to improve its own CO₂ fleet values: each manufacturer can share a balance sheet with everyone else. The ICCT turns this into a puzzle to see who might be interested: Volkswagen and Tesla, for example, or Ford and Volvo. These mental options are more mathematical models than real possibilities for action, because Tesla and Volvo would pay to sell the zero emissions of their own electric cars. On a smaller scale, however, there have been mergers in the past, such as Toyota with Mazda, Subaru and Suzuki.

As mentioned, the 28 percent of electric cars calculated by the ICCT would be the result of an extreme scenario. A particularly simple tool for improving CO₂ values and having to sell fewer electric cars is, for example, changing the CO₂ values of cars with combustion engines. Here, the ICCT assumes that there will be no reduction. However, manufacturers can already achieve a reduction by removing certain engine variants or producing more low-CO₂ versions. It is equally unlikely that the importance of PHEVs will immediately drop sharply in 2025. Volkswagen, for example, is going on the offensive once again at the end of this drive type. The long-range e-hybrids will have a slightly reducing effect before the first stage of the UF tightening takes effect in model year 2026.

More choice for electric cars in the A, B and C segments

The ICCT is not only aware of all this, it is also stated in principle in the analysis. Nevertheless, the ICCT does not commit itself to an exact share of electric cars in a plausible rather than an extreme scenario and prefers to describe a from-to spectrum.

If we take a current forecast from Schmidt Automotive Research, which assumes a good 22  percent of electric cars, and calculate the average, we can assume a market share of around a quarter. That is also much more than the 16 to 17 percent today. For customers, this means a greater choice of electric cars in any case, especially in the segment between 20,000 and 40,000 euros. In this way, buyer groups can be activated that are large enough to comply with the CO₂ fleet limits.

Link to the ICCT study

(mho)