Automotive News - March 11, 2024 - 43

March 11, 2024 * 43
Plug-in hybrid buyers face a learning curve
Hannah Lutz
hlutz@crain.com
Plug-in hybrid owners are taking advantage of the
technology's selling point: They are driving long
distances with gasoline and charging often for daily
commutes.
PHEVs make up a tiny fragment of the market at
less than 2 percent of total vehicle sales, according
to S&P Global Mobility. But that small group of
owners is drawn to a best-of-both-worlds scenario:
the ability to drive on electricity within a certain
range while always having gasoline power as a
backup.
Consumers face a learning curve on PHEVs, said
Beau Boeckmann, president of Galpin Motors,
which has dealerships in and near Los Angeles selling
Ford, Lincoln, Volvo, Mazda, Land Rover and
other brands. Many don't understand how the
technology works.
But once PHEV buyers return to Galpin Motors
for their next vehicle, they know they want another,
Boeckmann said.
" They don't want anything else, " he said. " It is absolutely
the best bridge technology that we have to
go pure EV, and for a lot of products, it might be the
best long-term solution. "
Galpin's customers reflect most PHEV owners:
More than 80 percent said they would buy another
PHEV, and two-thirds would also consider an electric
vehicle, according to J.D. Power.
Where and when they charge
PHEV owners are charging at home, and often.
Eighty percent of PHEV owners' frequent charging
is at home, rather than at public Level 2 chargers,
PHEVS
continued from Page 1
utilized first. They can drive on electricity
for a certain range, usually between
20 and 40 miles, and the gasoline-powered
engine takes over once
the battery is depleted.
Some drivers see PHEVs as a way to
reduce their carbon footprint without
fully giving up the freedom of a gasoline
vehicle. Others see them as a
steppingstone to a fully electric vehicle.
Most
PHEV owners surveyed by J.D.
Power said they would buy another
PHEV for their next purchase, but
two-thirds said they are also likely to
consider a battery electric vehicle, according
to the firm's 2024 Electric Vehicle
Experience Ownership Study. It
included 4,650 respondents and was
fielded from August to December
2023.
On average, PHEV owners use 70
percent of their vehicle's electric
range each day and charge five times
per week, J.D. Power said.
" PHEVs can be an effective intermediary
step for BEVs, " said Brent
Gruber, executive director of J.D.
Power's EV practice.
Meeting customers' needs
Many consumers are not ready to
purchase EVs because of limits in
charging infrastructure and driving
range, among other factors. By offering
PHEVs, automakers can decrease
emissions while also meeting customer
needs, said Stephanie Brinley,
automotive analyst at S&P Global
Mobility.
" The transition to electric vehicles
doesn't work if the vehicle doesn't do
what an owner needs it to do, " Brinley
said. PHEVs can " serve both masters, "
she said, giving consumers a range of
500 miles or more with gasoline and
electricity combined.
Approaches to PHEVs vary by automaker.
Toyota has a long-standing
and owners charge about five times per week, according
to J.D. Power.
For Kia PHEV owners alone, 87 percent charge
daily or multiple times per week, said spokesperson
James Bell.
Hyundai said nearly all its PHEV customers are
using the electric mode rather than running solely
on the gasoline engine, which the brand views as
an important step toward EV adoption.
" While owning a PHEV, customers get first-hand
experience figuring out charging, " said Olabisi
Boyle, senior vice president of
product planning and mobility
strategy. " These customers also
grow to fully appreciate the
benefits of PHEV life, including
going to the gas station less and
not spending as much when
they do. "
Consumer range anxiety has
hindered EV adoption. With
the ability to fill up at a gas station,
short electric range hasn't
Boyle: " Benefits
of PHEV life "
deterred PHEV owners from long drives. More than
85 percent of Hyundai PHEV owners are using their
vehicles for road trips, Boyle said.
New PHEVs in the market today typically have an
electric range of 20 to 40 miles. But many consumers
expect more.
AutoPacific's 2023 Future Attribute Demand
Study surveyed more than 11,000 drivers nationwide
who intend to buy a new vehicle within the
next three years. Of those who plan to buy a PHEV,
the highest percentage, 36 percent, want to drive at
least 100 miles in electric mode. Only about 17 percent
said they wanted 40 miles or less. About 21
percent said they wanted at least 60 miles and
about 24 percent wanted at least 80 miles.
Importance of education
Even though automakers have sold PHEVs since
2011 starting with the Chevrolet Volt, their small
share of the market means that many consumers
know little about them.
" They certainly know what a hybrid is, and they
certainly know what an EV is. But not everybody
knows what a plug-in hybrid EV means, " Boeckmann
said.
They're initially drawn to having both electric and
gasoline power options, he said, but then they have
questions about charging.
" Even L.A. people still have those questions, " he
said.
Many customers at Sierra Auto Group in Monrovia,
Calif., also ask about how to charge the vehicle
and how often. Consumers worry that if they don't
charge frequently enough vehicle performance
could suffer, said Sean Hogan, vice president of the
dealership group.
" That's the learning process that we have to go
through, " Hogan said. " If you don't charge it, it's not
going to break down. That's the stuff they are really
worried about. "
Most of Hogan's PHEV owners aren't ready for an
EV, but they like having a cleaner vehicle than gasoline-powered
alternatives.
" They're getting the car that they really want, " he
said, " but at the same time, they can make that
same statement that they're driving something that
is sensitive to the environment. "
How car buyers view their next purchase
Owners of battery-electric vehicles and plug-in hybrids were asked whether
they would be likely to consider a battery-electric, plug-in hybrid, hybrid or
internal combustion vehicle for their next purchase. Two-thirds of current
PHEV owners are likely to consider an EV for their next purchase. Still,
87% are likely to stay with a PHEV for their next purchase.
Currently own BEV
Likely to
consider BEV
Likely to
The Jeep Wrangler 4xe plug-in hybrid
is outselling the SUV's gasoline
counterpart at Sierra Auto Group in
Monrovia, Calif.
commitment to hybrids and PHEVs,
and it's paying off. Hybrids and EVs
made up more than 37 percent of the
automaker's sales in February, its
highest electrified share ever.
Stellantis, which earned the industry's
top PHEV share of 46 percent last
year between its Jeep and Chrysler
brands, said plug-ins will continue to
be important as the automaker aims
to reduce emissions. For Jeep, a large
percentage of PHEV buyers are new
to the brand, said spokesperson Rick
Deneau.
General Motors' renewed interest in
PHEVs is a reaction to EV demand rising
more slowly than the automaker
expected. Over the last few years, GM
has said its future lineup would be entirely
battery electric. But this year,
the automaker said it will add hybrids
to its portfolio to help meet emissions
standards.
Regulators will allow automakers to
use PHEVs as a tool to reach emission
targets. California's Advanced Clean
Cars II rule, followed by at least a dozen
other states, requires zero-emission
vehicles to make up 35 percent of
new-vehicle sales by the 2026 model
year, 68 percent by 2030 and 100 percent
by 2035. Automakers can meet
up to 20 percent of their sales requirements
with PHEVs that meet certain
electric range standards, according to
consider PHEV
Likely to
consider hybrid
Likely to
consider ICE
Currently own PHEV
96%
66%
39%
87%
21%
36%
20%
43%
Source: J.D. Power's 2024 Electric Vehicle Experience Ownership Study, which includes 4,650 respondents
and was fielded from August to December 2023
the California Air Resources Board.
Advocacy groups' support
Environmental advocacy groups
largely support PHEVs as a pathway
to reducing emissions. The Zero
Emission Transportation Association
and the Natural Resources Defense
Council each emphasized that protecting
the climate and public health
is the end goal.
" It is imperative that automakers
are making and selling much cleaner
vehicles and complying with strong
state and federal emission standards, "
said Luke Tonachel, senior strategist
for transportation at the Natural Resources
Defense Council. " Cleaner
gasoline vehicles, hybrids, plug-in hybrids
and full electric vehicles can all
be part of the mix. "
Still, automakers must continue to
invest in zero-emission vehicles to
eventually eliminate tailpipe emissions,
he added.
The Zero Emission Transportation
Association sees risks in an overreliance
on PHEVs, said Albert Gore, executive
director of the association.
PHEVs can reduce emissions more
than conventional hybrids only if they
are used in electric mode, he said.
Tracking electric range usage on
PHEVs is difficult, Gore said. Most
PHEVs on the market have between
20 and 40 miles of electric range, and
electric mode usage varies by driver.
Some consumers may use PHEVs in
gasoline mode for stretches of time,
he said. The Advanced Clean Cars II
rule requires PHEVs to meet a minimum
range of 50 miles.
" If you get significantly higher
all-electric range for PHEV, then obviously
that allows more people to operate
them in all-electric mode, " Gore
said.
Despite the flexibility of a PHEV, it
still represents a sliver of the overall
market, and it can be an added expense
for automakers already investing
in electrification, said Brinley.
PHEV share will likely rise, though at
a much slower pace than EVs.
" It's part of the mix, " said Brinley. " I
don't think it's the final answer. "
AROUND THE
AUTO WORLD
Here are edited highlights from the latest
episodes of " Daily Drive, " Automotive
News' weekday podcast, hosted by
Jamie Butters and Kellen Walker.
" I think it's not too difficult to
envision a future where, when
you are leasing an EV, the
battery health can be almost
treated the way that we are
looking at the odometer right
now. "
Eric Lyman, director of captive and
OEM solutions for Black Book
" Dealers are getting more
inventory on the ground.
Our members are our best
asset, and they're a great
demographic, and they're
very resilient to economic
changes, so they're always
going to be buying cars. "
Casey Ivins, vice president of the
eastern division for Costco Auto's
field team
To listen to all of Automotive News'
" Daily Drive " podcasts, go to
autonews.com/dailydrive.
VIEW
continued from Page 4
Europe to lead the transition to an
all-electric future and mitigate the effects
of climate change.
" The EPA's mission is to protect the
environment and to reduce the impacts
of the transportation industry
on both the global climate and the local
population and public health. The
industry's mission is to sell cars and to
have viable businesses, " Nigro told
Automotive News.
" Sometimes those goals can be competing.
Often they can be complementary,
but very rarely do they align perfectly, "
he said. " It's no surprise that the
industry wants to go slightly slower
than what the EPA is proposing. "
Where it stands
In response to industry pressure, the
EPA is widely expected to adopt a
less-aggressive pace of emissions reductions
followed by more stringent
cuts after the 2029 model year, giving
the EV market, supply chains and infrastructure
a chance to catch up.
Still to come
The EPA rule and other EV policies
are likely to be scrutinized in the upcoming
November
election, where
President Joe Biden will face off
against ex-President Donald Trump,
who loosened standards put in place
under predecessor Barack Obama.
" Regardless of where the election
comes out, I think the facts are going
to win the day, " said Nigro, citing
150,000 EV-related U.S. jobs that have
been announced since November
2021 and more than $125 billion in investments
tied to EVs after legislation
such as the Inflation Reduction Act
was signed into law.
" The leaders in the Republican Party,
even if they do take the White
House, are going to see that rolling
back regulations and/or slowing
down this transition are actually going
to hurt the U.S. economy far more
than help it, " he said.

http://www.autonews.com/dailydrive

Automotive News - March 11, 2024

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