STEP ASIDE DERV, HERE COMES PHEV (SORT OF)
In this article, Harrison Boudakin reports on the growing prevalence of plug-in hybrid vehicles, a phenomenon brought on by the changing perceptions and acceptance of diesel vehicles in the European marketplace
As Australia’s automotive independence has declined over the last decade, the law of the inverse transformation has inevitably and forever reshaped the car parc we once knew, creating a vibrant and dynamic landscape for the motorist of today.
Alongside Asia, and to a lesser extent, the Americas, the patchwork of Australian automotivity includes a very sizeable swatch of European influence – which, given the changing dynamics of that market, promises to expose our motoring horizon to some very interesting and exciting new trends over the next few years.
It goes without saying that in the turbulent wake of diesel emissions revelations, strong political disruption and the arrival of upstart new players, Europe’s diesel-oriented automotive scene has been contorted by the conflicting demands of conservative buyers and zealous new regulatory frames. Perhaps more than any other element, the region’s love affair with diesel has been dealt a severe hand, as legislation now forces OEMs to dramatically reduce CO2 emissions on the one hand, while also cutting noxious particulates on the other.
In plain engineering terms, the pursuit of these twin goals is akin to pulling one cart in two directions, and the result is diminishing diesel returns at great expense for the manufacturer. One also cannot forget the imperative OEMs now face to make considerable investments in battery and electric vehicle technology, further straining their cash reserves.
The challenge therefore presents as follows: while diesel continues to offer a path to CO2 reduction in the short term, the reality is that achieving those reductions is becoming ever more costly and increasing the complexity of the vehicles customers buy. Yet manufacturers are as aware as anyone else that neither the technology, nor the infrastructure required to support full electric vehicles, is yet ready to make them a viable “mass-market” alternative to existing diesel passenger cars in the immediate future.
So what are OEMs to do? Well, one option that appears to be gaining some momentum in the European sphere is the plug-in hybrid: a vehicle which, in theory, promises to bridge the divide between Europe’s diesel dependency today, and the full-electric reality of tomorrow…or the day after.
While far from a new idea in automotive circles, the plug-in hybrid (or PHEV) concept has to date remained a peripheral player, with only a handful of instances finding traction in the marketplace. Now though, these “hybrids plus-plus” present as a kind of magical bridge for automakers, preserving the usability of traditional combustion models, while allowing OEMs to reduce CO2 outputs by between 50 and 80 percent, all while moving away from the higher NOx emissions of diesel models.
In so many ways, the PHEV is an ideal mechanism for automakers to blast away the regulatory chicanery that now lies ahead of them in the short-term. Adding an electric motor and a battery that can be mains-recharged to a conventional (usually petrol) model, is a fast-track to meet the 95g/km CO2 fleet average figure mandated by the European Union for 2020, with many of even the larger, SUV PHEVs able to record CO2 figures below 50g/km. They also qualify for what are termed “super credits” in the EU, meaning sales of PHEVs allow automakers to offset commensurate sales of higher-emitting vehicles in their line ups until 2023.
And perhaps most importantly to customers, PHEVs qualify for entry into the Ultra-Low Emissions Zones that are becoming increasingly prevalent across Europe’s city centres – zones from which conventional petrol and diesel vehicles are banned.
In an academic sense, then, it’s little wonder that sales of PHEVs in Europe are expected to double next year, reaching nearly 600,000 units, or more than three percent of total EU market share – a figure that will see them eclipse (albeit temporarily) full-electric vehicles. By 2025, it’s predicted PHEVs will have passed 5.2 percent share, with more than a million sold per annum in Europe alone.
Yet for all the zeal with which automakers are embracing the plug-in hybrid model, there can be no denying that the road to PHEV reliance is littered with enormous risks for automakers. Put simply, while they are undoubtedly an effective “gateway drug” for buyers making the difficult switch away from diesel vehicles to full-electric ownership, their saleability depends heavily on the regulatory system recognising them as ecologically effective.
At present, legislators across the EU are in fact acting rather generously in their approach to plug-in hybrid vehicles, with the European emissions tests producing exceptional figures for PHEVs by virtue of a “best-case scenario” drive cycle, which assumes a fully-topped up battery and includes a large portion of conditions that favour electric-only use.
And yet if, as the evidence seems to show, the majority of plug-in hybrid owners don’t always charge the batteries from the mains, and instead treat their vehicles as more conventional “self-charging” hybrids, the reality is that they’ll miss the quoted figures by more than a moon-shot. But it’s highly likely that despite having full knowledge of this phenomenon, the EU’s decision to stick with an ultra-low emissions classification for plug-in hybrids is a calculated move designed to hasten consumer acceptance of vehicle electrification.
There’s also the issue of cost: fitting the battery, drivetrain control systems and electric motors to an existing combustion engine architecture adds roughly $9000 per vehicle, a burden OEMs cannot possibly expect consumers to shoulder. Instead, manufacturers are relying on incentives (be they tax breaks, rebates or grants) to stimulate PHEV demand and shift buyers away from the tempting efficiency and lower entry cost of diesels.
In France, for example, a CO2-based taxation curve is ripe for driving buyers away from larger diesel vehicles and towards PHEVs, as is also the case in Germany, where the tax on diesel is now twice that on plug-in hybrids. The commensurate uptick in demand for PHEVs created by these structures will undoubtedly push manufacturers to develop and export more of these models, the results of which we are already starting to feel on the Australian front.
Porsche, for instance, has substituted some of its diesel models with plug-in hybrids, with Audi, Volvo and Mercedes having launched their own PHEVs to compete. Indeed, plug-ins are proving particularly successful in the premium market, with 52 percent of European Porsche Panamera sales in the first half of this year made up of PHEV models.
Of course, in the longer-term, nature cannot be fooled. If governments cut back on incentives for PHEVs, as happened in Holland recently after data showed that users were not realising the full ecological benefits of their PHEVs by neglecting to mains-charge their vehicles, then the plug-in revolution could be cut swiftly and dramatically short.
But as long as the current, quite unreal European emissions regime continues to favour hybridised vehicles, in the near-future, at least, plug-ins will play a significant (if not ever-lasting) role in filling the void created by diesel’s declining stocks, and Australia can certainly expect to feel the effects of this change, particularly in the premium markers – even if it pays to remember that while the plug-in hybrid is a significant half-step towards the future of automotive propulsion, the real electric show has only just begun.