[Bojo, Battery] PHEV Becomes a 'Stepping Stone' in the Electric Vehicle Era

Q1 PHEV Sales Up 46% YoY
PHEV Now Equipped with Large-Capacity Batteries Over 30kWh
Charging Experience Lowers Entry Barriers for Electric Vehicles

Electric vehicle charging. Photo by Hyunmin Kim kimhyun81@

Rapidly growing plug-in hybrid electric vehicles (PHEVs) are playing a 'stepping stone' role in the electric vehicle era. They provide users with experiences such as charging and low maintenance costs, breaking down entry barriers.

According to market research firm Counterpoint Research, PHEV sales in the first quarter of this year increased by 46% compared to the same period last year. In contrast, battery electric vehicle (BEV) sales grew by only 7% year-on-year. Another market research firm, EV Volumes, reported that about 430,000 PHEVs were registered globally in April this year, a 51% increase from the same month last year. During the same period, about 800,000 BEVs were registered, but the growth rate was around 14% year-on-year.

Regarding the sharp growth of PHEVs, some express concerns that "PHEVs might be cannibalizing BEV demand and thus reducing battery demand." However, the electric vehicle and battery industries view the growth of PHEVs as accelerating the electric vehicle era.

PHEVs, like regular hybrid vehicles, are a type of electric vehicle powered by both an engine and an electric motor. They have an electric plug that allows battery charging from external power sources. While regular hybrids have battery capacities of less than 2 kWh, recent PHEV models feature high-capacity batteries of 30 to 40 kWh. According to SNE Research, the average battery capacity of PHEVs increased from 14.8 kWh in 2019 to 24.7 kWh in 2023 in China, from 12.3 kWh to 15.1 kWh in Europe, from 11.5 kWh to 16.8 kWh in North America, and from 11.4 kWh to 15.9 kWh in other regions. The average battery capacity of BEVs ranges between 66.6 and 77.4 kWh. Although PHEVs do not carry as large batteries as BEVs, they still require large-capacity secondary batteries.

PHEVs typically operate in electric mode, which has low maintenance costs, but can switch to the internal combustion engine for long-distance driving to extend range. They combine the advantages of both electric and internal combustion engine vehicles. Automakers like Ford and GM are introducing or increasing PHEV models ahead of their electric vehicle models. In the PHEV market, the three major Korean battery companies are leading. Samsung SDI supplies batteries for PHEV models of BMW and Jeep, LG Energy Solution for Volvo and Chrysler, and SK On for Ferrari and Mercedes-Benz.

PHEV buyers can also be seen as potential BEV consumers. Bj?rn Annwall, Chief Commercial Officer (CCO) of Volvo Cars, said during a conference call earlier this year, "We believe that consumers who purchase plug-in hybrids have taken the first step toward 'full electrification,' and their next vehicle will be a battery electric vehicle." According to recent research by Professor Gil Tal, director of the Electric Vehicle Research Center at the University of California, Davis campus, about one-third of PHEV buyers are expected to purchase a BEV as their next vehicle.

Experts highlight that PHEVs provide the important experience of 'charging,' similar to BEVs. By reducing consumers' resistance to charging, PHEVs encourage future steps toward BEVs. Patrick Fl?tz, a researcher at the Fraunhofer Institute for Systems and Innovation Research in Germany, said, "Once PHEV buyers become familiar with charging their vehicles, they will feel ready to transition to battery-only electric vehicles."

An industry insider stated, "Plug-in hybrid buyers tend to have less resistance to pure electric vehicles. In the long term, as charging infrastructure and other related environments improve, these buyers could lead the way in BEV purchases."