Full-electric vehicles are the darlings of the automotive world. Elon Musk's Tesla enjoys a market capitalization that is the envy of conventional competitors, while investors are throwing billions in cash at unproven startups, hoping to catch a little of the EV magic. Automakers and governments are racing to declare ever-earlier end dates for the internal combustion engine.
But in Europe, it is the plug-in hybrid that is the unsung emissions workhorse. With batteries that allow them to run in zero-emissions mode for typical commute distances, plug-in hybrids are certified for CO2 emissions that are a small fraction of their internal combustion-only equivalents. Those with emissions below 50 grams per km qualify for EU "supercredits," adding to their emissions-reducing value.
Beyond helping automakers avoid fines, plug-in hybrids are eligible for generous tax benefits-in-kind for company cars (in the UK and Germany), can avoid high-emissions initial purchase taxes (in France and Sweden) and get purchase and trade-in incentives (in France). Plug-in hybrid owners can even qualify for priority parking permits (in Amsterdam).
Buyers, especially businesses and fleets, which account for about 70 percent of sales, have embraced plug-in hybrids. Plug-in hybrids are selling in equal or better numbers than EVs in Europe this year.
Matthias Schmidt, an independent auto analyst in Germany who closely tracks plug-in hybrid sales, says 2021 will be "the year of the PHEV."
"I see PHEVs [plug-in hybrid electric vehicles] as a complete elephant in the room," Schmidt said. "Lots of people talk about EV penetration being 15 to 16 percent in Europe, but they don't actually realize that more than 50 percent of those are PHEVs."
Recently, however, plug-in hybrids have come under intense scrutiny from environmental groups and analysts as failing to live up to their low-emissions promise, with one, Transport & Environment, calling them "fake electrics." Real-world CO2 emissions, they say, are on average two to four times as high as certified values.
As such, critics say, plug-in hybrids are merely "compliance technology" tools to avoid emissions fines and allow automakers to continue selling highly profitable models -- especially big SUVs -- that also benefit from generous (and undeserved) incentives, while deferring sales of unprofitable EVs.
Not so fast, automakers say. They argue that plug-ins are a necessary bridge between affordable internal combustion cars that can be fueled up anywhere in minutes and expensive EVs that take hours to charge at hard-to-find dedicated public outlets.
Driven as intended, they say, plug-in hybrids are clean and efficient, and get drivers used to quiet, powerful EVs without range anxiety.