Car companies skipping plug-in hybrids in race for electrification

Tuesday, 24 January 2023

Subaru is reportedly cutting PHEVs from its development roster, and it isn’t alone.

Japanese manufacturer Subaru is reportedly cutting its plug-in hybrid development programme short to instead focus on conventional hybrids and fully electric vehicles.

The update comes via Nikkei Asia. The outlet reports that the brand has made the decision based on the poor sales of its one plug-in hybrid – the Crosstrek PHEV.

Badged locally as an XV, the Crosstrek PHEV has never been offered in New Zealand. It has been a mainstay in the US, though, since 2018. It accounted for less than 1% of Subaru’s total sales in the region last year.

The report explains that Subaru is unlikely to rely solely on its partnership with Toyota for its future electrified products, stating that a switch to its own in-house technologies is likely to come by 2025.

Talks around a Ford Ranger plug-in hybrid have died down, leading some to question of the blue oval has benched the project in favour of full EV.

Volvo has committed to going fully electric in New Zealand by 2026, leaving no room for PHEVs.

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Subaru has already confirmed that it plans to invest almost $3 billion into its electric vehicle division over the next five years, culminating in the opening of a new EV factory in Gunma near Tokyo in 2027.

The brand expects EVs and hybrids to account for 40% of its revenue by the end of the decade. Its first EV, the Solterra (a direct sibling to Toyota’s bZ4x) is set to land in New Zealand later this year.

Subaru isn’t the only car company that appears to be favouring EVs over PHEVs.

It has been speculated that rumoured and spied plug-in hybrid Ford Ranger has been shelved in favour of going straight to a fully electric powertrain. Volvo is set to cull all PHEVs from its line-up by the end of the decade, as will the likes of Mini and Bentley.

Some of this trend stems from looming bans on the sale of new internal combustion engine vehicles, with the likes of the UK set to implement these regulatory changes in 2030.

Brands are also likely to be reacting to EV popularity overtaking PHEV popularity in a big way. While global PHEV sales increased last year, they did not grow as rapidly as EV sales – which accounted for 10% of the overall global market, according to the Wall Street Journal.

Not all brands are dumping PHEVs just yet. Mazda’s first PHEV, the CX-60, lands in New Zealand later this year, and they continue to be popular among brands in the premium segment.

A shift to solely EV development means having to tackle the high price of developing larger batteries, with prices for materials like lithium skyrocketing in 2022 off the back of the war in Ukraine and supply shortages.

Locally, sales of pure electric BEVs grew significantly last year, rising from 6,897 in 2021 to 16,223. this saw them outsell plug-in hybrids by almost two to one (7,259 PHEVs were registered in 2022).

While hybrid vehicle sales grew year-on-year – from 13,794 to 17,621 – electric vehicles appear set to overtake them for popularity in 2023 assuming the momentum shown last year continues.