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Here Comes the Flood of Plug-In Hybrids

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Here Comes the Flood of Plug-In Hybrids

Last week, the Biden administration made it official: American cars are really going electric.

The U.S. Environmental Protection Agency has finalized a long-in-the-work rule that will require automakers selling in the United States to dramatically increase the number of battery-powered vehicles sold this decade, seriously shaving off the nation’s carbon emissions affected. By 2032, more than half of new cars sold must be electric.

Carmakers will have more leeway in choosing how to achieve the government’s new tailpipe emissions targets, thanks to changes made between when the rules were first introduced in draft form almost a year ago and now. One big, important shift: plug-in hybrids are part of the picture.

In the rule’s design, auto companies could only achieve gradually increasing zero-emissions goals by selling more battery-electric cars. But after lobbying from automakers and unions, both of which argued the EPA’s proposals were unrealistic, manufacturers will now be allowed to use plug-in hybrids to meet the standards.

This means automakers can now meet federal rules by ensuring that two-thirds of their sales are battery-electric by 2032 – or that battery-electric vehicles make up just over half of their sales, and plug-in hybrids 13 percent for their account.

Expect automakers to take advantage of these types of hybrid vehicles — which are powered primarily by electric batteries but supplemented by a gasoline engine once the batteries run out — as they race to meet the country’s most ambitious climate goals yet.

There will be a lot of these things on the way. But the technology has a climate problem: it is only as emission-free as drivers want.

Gateway EV drug

In recent months, executives from manufacturers such as Audi, BMW, Chinese EV maker BYD, General Motors, Mercedes and Volvo have suggested that the ‘compromise’ cars can be a springboard that launches more cars and customers into the electric transition. And the policy change could be that justification for Toyotawhich is counting on customers to opt en masse for gas-electric hybrids and plug-in hybrids instead of following Tesla on a fully electric path.

Globally, sales of plug-in hybrids are growing faster than those of battery-electric vehicles (although this is partly because hybrids still have further to ramp up). Sales of plug-in hybrids have increased by 43 percent to almost 4.2 million between 2022 and 2023, according to figures from market research agency BloombergNEF. Sales of battery-electric vehicles rose 28 percent to almost 9.6 million in the same period.

The technology has a number of powerful advantages. The average American driver only travels about 30 miles each day, meaning most can get by on just a plug-in hybrid’s electric battery most days, and on gasoline alone during longer trips.

Plug-in hybrids also make some automakers less nervous, production-wise: They’re more expensive to build than pure battery electric (the whole twin-motor thing), but the technology can sometimes be retrofitted to existing gas-powered cars. This means less work, in the short term, an exciting prospect for an industry that must once again change both the way it builds its cars and the way it sources the materials that will power their batteries for decades to come, as they moving towards electric cars.

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