Hybrid cars made up 45.1% of total EV deliveries in mainland China in July, versus 34.3% a year ago. China’s automotive industry statistics are showing an interesting twist for the nation’s biggest manufacturers: plug-in hybrid cars are winning the hearts of consumers over pure electric vehicles (EVs), as drivers seek to overcome range anxiety and costs. Hybrid cars, which can run a short distance on battery and switch to fuel for longer drives, now account for almost half of new EV sales this year, with several producers revving up development and production to meet growing demand.
BYD, Volkswagen, Toyota and their peers sold 396,000 hybrid cars to mainland Chinese buyers in July, or 45.1% of total EV deliveries, according to the China Passenger Car Association (CPCA). “Hybrid cars are more economical to many young, first-time car buyers,” said Zhao Zhen, Sales Director with Shanghai-based dealer Wan Zhuo Auto. “They are a surprise beneficiary of an economic slowdown.” Chinese consumers are more cautious in their spending, leading to poor gains in retail sales. A multi-year housing slump and rising job losses have pushed many to prepay their mortgages, trimming debt rather than boosting spending.
Retail spending increased 3.7% to CNY23.6 trillion in the first six months this year, lagging the national economic growth rate of 5%. It was also about half the 7.2% growth recorded in 2023. The plug-in hybrid category also includes vehicles with extended-range technology, with a small internal-combustion engine that generates additional power to charge the battery when needed. These cars, known as BEVs or battery electric vehicles, are about 10% cheaper than pure EVs. Hybrid cars, including BEVs, also enjoy government incentives, including a waiver of the 10% consumption tax and subsidies for replacing petrol-powered cars as part of Beijing’s push towards its long term clean energy and net-zero target.
“Since I need to commute between Shanghai and neighboring cities, an EV with a driving range of about 400 km is not my primary choice due to range anxiety,” said Yvonne Qian, a Shanghai resident who works at a Hangzhou-based tech company. “BEVs will be the first choice for me in future when ultra-fast charging and battery swap technologies become more popular.” Dealers said many buyers turned to hybrid cars on heightened concerns about rapid battery depletion in winter. Video clips showing dozens of EVs stuck in a snowstorm in central Hubei province during the Lunar New Year went viral in February, after their batteries ran out. The incident reinforced fears among car buyers that fully-electric cars are still not reliable for long-haul travel.
Some hybrid models offered by carmakers are popular with consumers because of their prices and long driving ranges, ratcheting up pressure on traditional makers like Volkswagen and General Motors. BYD, the world’s bestselling EV assembler, unveiled a new and improved version of its plug-in hybrid technology in May to encourage the adoption of electric cars. The Qin L and Seal 06, two of its improved models fitted with the “dual mode” technology, can go as far as 2,100 km on a single charge with a full tank of petrol, it claimed. The batteries used to power the basic versions offer a driving range of up to only 80 km. Entry-level versions of the Qin L and Seal 06 are both priced at CNY99,800, compared with the VW Sagitar’s CNY127,900 and the Toyota Corolla’s CNY116,800. Fuel consumption, when the batteries are depleted, is a record low 2.9 liters per 100 km, according to BYD.
Some analysts see this as a passing trend. The appeal of pure EVs will only increase under national efforts towards zero emissions, according to Davis Zhang, Senior Executive at Suzhou Hazardtex, a supplier of specialized batteries. “Pure electric cars reflect the trend of the future of mobility amid the world’s carbon-neutrality goal,” he added. “Sales of hybrid vehicles will not sustain their growth momentum in the long run. It is advisable for major players to remain focused on making fully-electric cars.” That can probably wait. Only a few among China’s 50-odd EV assemblers, namely Nio, Xpeng and Baidu-backed Jiyue, solely focus on developing and making pure electric cars. At least three Chinese EV makers have announced this month that they plan to up their ante on hybrid technology to develop new models as a way to soak up consumer demand. Zeekr Intelligent Technology, the premium EV maker controlled by Geely Auto, said it would design and build its first hybrid models to vie for a bigger market share. Avatr Technology, the EV unit owned by Changan Automobile, is also pursuing the same plan and path. Hozon New Energy Automobile, the Chinese start-up preparing for a stock listing in Hong Kong, launched the Neta S this week, offering an extended-range variant that can travel as far as 1,200 km on a single charge, the South China Morning Post reports.
