The age of the plug-in hybrid electric vehicle (PHEV) that can charge from a power point and fill up at the service station appears to be drawing to an end, at least in Australia.

The latest industry figures show EVs accounted for a record 9.4 per cent of new car sales in June, up from 1.7 per cent a year earlier.

A diminishing fraction of these EVs are plug-in hybrids (PHEVs), which switch to burning petrol or diesel when their battery’s charge is nearly depleted.

PHEVs once dominated EV sales, but are now being rapidly displaced by fully battery electric vehicles (BEVs).

So, what killed the PHEV?

The answer to this question wades into a long-running debate that’s shaping the types of cars available in Australia, and how much they cost.

The rise and fall of the plug-in hybrid

When they arrived in Australia about 10 years ago, PHEVs were marketed as a cleaner form of an internal combustion engine vehicle (ICEV).

They also side-stepped some of the perceived problems with BEVs, such as driving range and charging infrastructure.

PHEVs have an internal combustion engine, an electric motor, and a relatively small rechargeable battery, with a range of 50 –100km.

If the battery runs low, the car automatically switches from the electric motor to the engine, and burns fossil fuel.

“There wasn’t enough confidence in BEVs in the past,” said Hussein Dia, a transport expert at Swinburne University.

“[PHEVs] were readily available on the market and few companies did well in developing them and marketing them.”

Sales didn’t exactly boom, but they were initially stronger than for BEVs.

As the graph above shows, in 2018 PHEVs accounted for half of EV sales.

Since then, BEVs have raced ahead.

In June, PHEVs accounted for 6.24 per cent of EV sales.

One reason for this has been that BEVs have gotten better. Range and charging times have improved, prices have gone down and more models have entered the market.

At the same time, doubts have been raised about whether PHEVs are as clean as they claim to be (more on this later).

Until mid-2022, the exception to the story of BEV triumph was the SUV market, where PHEVs held their ground.

This was concerning on environmental grounds, as a PHEV SUV can be just as polluting as some low-emission ICEVs.

To an extent, EV statistics were hiding an increase in the sale of large cars that continued to burn fossil fuels.

“A lot of people have become sceptical of PHEVs,” Professor Dia said.

“From a sustainability point of view they were meant as a transition technology, not the end game.”

In the past year, however, fully battery electric SUV sales have outstripped those of plug-in hybrid SUVs.

PHEV sales are still rising, but their market share is falling sharply.

How much do PHEVs emit?

In recent years, a series of studies has shown PHEVs are much dirtier than previously thought

One of these, a 2022 study by the Washington DC-based International Council of Clean Transportation (ICCCT), tested 9,000 private and company PHEVs in Europe.

It found PHEVs consumed three to five times more fuel than had been officially declared and communicated to consumers

The combustion engine generally kicked in much more often than realised when the car was driven in “real-world” conditions.

“The testing procedure said the vehicle would drive around 70–80 per cent on electric motor,” Professor Dia said.

“When they did the real-life study they found for private cars the electric motor kicked in 50 per cent of the time.”

And for company cars, which are driven more often and for longer distances, the electric motor was only used 15 per cent of the time.

The following year, another European study found some PHEVs pollute three times more than their official rating when driven on a typical commuter route.

These revelations have led to the European Union adopting an amendment, which comes into effect in 2027, that more than doubles its official estimate of the CO2 output of PHEVs.

Do PHEVs emit less than standard petrol or diesel cars?

But emissions associated with operating the car is only one element of all the emissions tied to vehicle ownership.

A car’s total “life cycle emissions” also includes emissions associated with manufacturing and disposal.

The good news is that the life cycle emissions of many car models have been independently modelled.

The bad news is the modelling often isn’t specific to Australia.

Here’s a snapshot of the life cycle emissions of ICE, PHEV and BEV cars sold in Europe, from a study published last year.

Lifecycle emissions of ICEVs, PHEVs and BEVs, plotted against vehicle weight
Lifecycle emissions of ICEVs, PHEVs and BEVs, plotted against vehicle weight.()

There’s a lot to take in here, but the main points are that petrol and diesel ICEVs (blue and orange dots) have significantly higher life cycle emissions than the other types of cars.

A BEV charged on renewables (purple dots) has by far the lowest life cycle emissions.

Between these two extremes are the PHEVs (yellow and light green dots), which can exceed the life cycle emissions of the least polluting ICEVs, when charged from non-renewable sources.

You can find more emissions data for specific models here.

A car fuel door showing petrol and electric options.
Some experts are concerned PHEVs could unncessarily prolong the stay of fossil fuels in road transport.()

John Rose, a professor of sustainable transport at the University of Sydney, said BEVs generally have slightly higher emissions associated with their production than ICEVs.

But these are heavily outweighed by the lower operations emissions.

He noted that vehicles manufactured in the US and Europe typically have lower production emissions, due to the greater proportion of renewables in the energy mix, compared with Asia.

“In Asia, the energy used in manufacturing process comes from dirty coal,” he said.

Most of the cars sold in Australia, including BEVs, are made in Asia.

Do PHEVs count as EVs?

This is one of the questions up for debate.

The outcome will determine what cars manufacturers sell in Australia, and which ones receive purchase subsidies.

Late last year, the Greens and independent senator David Pocock argued against PHEVs being classed as EVs, securing amendments that limited the level of government support they received.

PHEVs won’t be exempt from the fringe benefits tax after 2025.

At the state and territory level, it’s more complicated.

Some states provide incentives for PHEVs while others limit this support to “zero-emission vehicles”, a category that generally does not include PHEVs.

Professor Dia expects subsidies will be quietly withdrawn for PHEVs in coming years, as the technology is surpassed by BEVs.

“PHEVs do reduce emissions compared with a petrol or diesel vehicle,” he said.

“But not by the percentages with which they have been promoted to us.”

But some car makers disagree.

Those most invested in PHEV technology have claimed that in countries with electricity sourced from burning coal, such as Australia, PHEVs have lower emissions than BEVs (which use more electricity).

It’s not clear what modelling or assumptions this claim is based on, and Professor Dia said it probably wouldn’t pass scrutiny.

“There is a push from a couple of companies to keep the plug-in hybrid alive for as long as possible,” he said.

He also noted that Australia’s electricity would soon mostly be sourced from renewables. Some states, like Tasmania, already have 100 per cent renewable electricity generation.

EV owners can also charge directly from rooftop solar panels.

What’s the future of PHEVs?

While PHEVs’ share of EV sales is predicted to drop in many countries, it’s on the rise in the world’s largest auto market.

In the first quarter of 2023, PHEV sales in China grew 88 per cent year-on-year, compared with 29 per cent growth for the total EV sector.

PHEVs receive government EV subsidies and Chinese car makers have also invested heavily in the technology.

BYD, for instance, has four out of the top-five selling PHEV models.

A PHEV on display at a Shanghai auto exhibition in 2023
A PHEV on display at the Shanghai International Automobile Industry Exhibition in April 2023.()

The result of the PHEV boom in China is two diverging narratives of the future of electric transportation.

In one, PHEVs are a transition technology that will soon fade away.

In the other, they’re just getting started.

What about PHEVs in Australia?

The direction PHEV sales go in Australia could be determined by the detail of the proposed fuel efficiency standards.

The government announced the plan to introduce fuel efficiency standards in April, but provided little detail.

A draft of the policy is expected by the end of the year.

The standards mandate a set figure for carbon emissions per kilometre for the average of all new vehicles sold by each car manufacturer.

This creates an incentive for manufacturers to sell more low or zero-emissions cars, to bring down the average emissions of new vehicles sold, and avoid financial penalty.

If Australia’s official assessment of PHEV emissions is lower than in other markets with fuel efficiency standards, car makers will have an incentive to sell more PHEVs in Australia, Professor Dia said.

That could open the door to a flood of relatively cheap PHEVs, similar to what’s happened in China.

Although Professor Dia sees PHEVs as a transition technology that’s on the way out, he recognises car buyers have the final say.

This month’s figures suggest car buyers have made up their minds.

“Range anxiety” is no longer pushing EV buyers to PHEVs. Instead, they’re opting for BEVs’ lower emissions and running costs.

“A consumer who buys a PHEV [may] find the fuel consumption is 3-5 times what they have been promised,” Professor Dia said.

“That’s not good for anyone.”

Extracted in full from: Plug-in hybrids once dominated EV sales. Now their market share is tanking – ABC News