Polestar reluctant to bring plug-in hybrids back into its lineup

Polestar is unlikely to follow fellow Geely brands Smart and Zeekr as they consider adding plug-in hybrid electric vehicles to their lineups in China.

Smart and Zeekr, which only offer full-electric models in Europe, are mulling the move to capitalize on growth of PHEVs in the world's largest car market.

Sales of vehicles with the powertrain increased 85 percent to 1.92 million in China in the first half. As a result, PHEVs accounted for 39 percent of all new energy vehicle (NEV) sales in the country, according to the China Association of Automobile Manufacturers.

By comparison, sales of full-electric models rose 12 percent to 3.02 million during the half, giving them a 61 percent of total NEV sales. NEVs include full-electric, plug-in hybrids and range extenders in China.

The unexpected growth of PHEVs has forced electric-only brands to reassess their portfolios and it has also led automakers such as Nissan, General Motors and Volkswagen to expand the use of the technology in their lineups.

Polestar CTO Lutz Stiegler called the topic a “100 percent China discussion” as he believes there isn't a comparable push to add PHEVs in other markets.

“Polestar was founded as an all-electric brand despite starting with a plug-in hybrid. The Polestar 1 (a limited-run PHEV built from 2019-21) was supposed to be the last,” Stiegler told Automotive News Europe.

He added: “From that perspective, I don't see it [Polestar adding another PHEV]. But you can never say never nowadays because you don't know what the politicians will decide next year. That being said, from a technology standpoint it doesn't make much sense outside of China.”

Stiegler said PHEVs have faced criticism in several European markets because many of them were used as company cars and never plugged in to recharge. This means they were being driven using combustion engine power instead of zero-emission battery power.

Hungary decided this week to end incentives given to PHEVs on Sept. 1. PHEVs have qualified for incentives in the country since 2016, according to a report in Daily News Hungary.

Plug-in hybrids emit 350 percent more CO2 emissions in real-world driving than their laboratory test values, according to results of the EU's first year of collecting data using on-board fuel consumption monitors.

The data was gathered in 2021 from a sample of 600,000 cars, the European Commission said in March.

Despite the poor performance when it comes to CO2 emissions, PHEV sales in Europe were up 2.1 percent to 481,366 in the first half, according to preliminary figures from market researcher Dataforce.

Brands including Volkwagen Skoda and Renault are increasing their PHEV lineups in Europe.

Skoda, for example, last month opened orders on the new Superb iV PHEV, which has an electric-only range of about 135 km (84 miles), more than double the current model's 56-km range. Emissions are just 8 grams per km.

Renault is revisiting PHEVs with its new Rafale flagship SUV, which will have an electric-only range of about 100 km, about twice the range of the discontinued PHEV drivetrains used in the automaker's Captur and Megane models.

PHEV penetration was 7 percent in the first half, according to preliminary data representing 95 percent of sales in the European Union, the EFTA countries and the U.K.

Despite recent growth in PHEV sales in Europe, the powertrain's market share is relatively low compared with BEVs or full hybrids and is unlikely to rise significantly, said Matthias Schmidt of Schmidt Automotive Research, who closely tracks the BEV and PHEV markets.

That market share is not likely to rise above 10 percent as emissions targets continue to tighten ahead of a zero-emission mandate for 2035, Schmidt said.

The market share in Europe for full-electric models such as the Polestar 2, 3 and 4 was 13.8 percent during the first six months.

However, BEV sales have slumped in key markets such as Germany, where demand fell nearly 40 percent in July. It's the biggest drop since December when the German government suddenly scrapped EV subsidies.

“The ramp-up of e-mobility is proving to be unsustainable so far,” Constantin Gall, a consultant at EY said about the German results. “The market has lost all momentum, and many customers doubt the prospects of electric cars.”

Stiegler questions the backlash against all-electric cars.

“The arguments against the technology are not really correct, and a lot of the negative feedback is coming from people who have never driven an EV,” he said, adding that achieving affordability cannot be done without trade-offs.

“The industry can provide electrified cars at a lower cost. This is no problem. But those cars will not have the same usability as today's EVs. If no one wants to compromise on either cost or usability or anything else, then it gets really tricky,” he said.

A Polestar small SUV?

When it comes to offering an affordable full-electric car, Polestar's sister brand Volvo has benefited from the arrival of the EX30 small SUV, which starts at €39,790 in Germany.

Through July, Volvo has increased sales 33 percent to 222,024 largely because of strong demand for the EX30, which is the No. 3-selling full-electric model in Europe behind the Tesla Model Y and Model 3.

When asked whether there was room in the Polestar lineup for a similar model, Stiegler said: “If you asked me as an engineer, I would say, 'Yes.' If you ask me as a member of the management board of Polestar, it would be a bit difficult to do as a progressive performance brand. For us to compete on price with the EX30 or the Smart doesn't make sense.”