Chinese Consumers Flock to Affordable Hybrids as Electric Vehicle Market Grows, China

Headline: Surging Demand for Affordable Hybrids Fuels China’s Record-Breaking Sales

Lead: China’s plug-in hybrid vehicle market has witnessed a remarkable surge, with over 1.3 million units sold this year—a staggering increase from the 798,000 sold in 2022. This growth reflects a shifting trend among Chinese consumers, who are increasingly opting for hybrids due to their affordability. Unlike many markets around the world, where hybrids come with a premium price tag, some models in China are actually cheaper than traditional gasoline vehicles and even 23% more affordable than battery-electric vehicles.

In response to this growing demand, sales of plug-in hybrids during the January to September 2023 period skyrocketed by an impressive 72%, reaching a total of 1,370,324 units, compared to the 798,164 sold last year. Moreover, sales of extended-range hybrids (EREVs) have surged by an astonishing 157%, escalating from 153,925 units to 395,390 units. This dazzling performance puts the growth of battery-electric vehicle (BEV) sales in the shade—BEV sales increased by a modest 14% this year, from 3,076,827 to 3,503,366 units. Meanwhile, sales of conventional internal combustion engine (ICE) vehicles have experienced an 11% decline, plummeting from 10,634,847 to 9,498,793 units, as revealed by data from the China Association of Automobile Manufacturers, published by Reuters.

People are increasingly accepting that a car can be equipped with both an electric motor and a gasoline engine, as they are highly complementary, noted Xu Min, professor at the Shanghai Jiao Tong University Institute of Intelligent Vehicle. Wherever the gasoline engine is low in efficiency, we can make up for it with the electric motor.

BYD emerges as the leader in the local plug-in hybrid market, dominating sales with eight out of the top ten best-selling PHEV models in the country. Li Auto, on the other hand, has taken the lead in extended-range hybrid vehicles. However, the interest in traditional hybrids is dwindling, as sales have experienced a 15% decline this year, reaching 525,096 units, which poses a challenge for Toyota, a brand renowned for its popular hybrids.

The data indicates that battery-electric vehicles (BEVs) currently represent 60% of all electrified vehicles sold in China, followed by plug-in hybrids (PHEVs) with a 24% share. Traditional hybrids hold a 9% market share, while extended-range hybrids (EREVs) account for 7%. Surprisingly, hydrogen fuel-cell cars only sold a mere 300 units in the country this year.

With China at the forefront of the electric vehicle revolution, these figures demonstrate the country’s determination to lead the charge in reducing carbon emissions. The popularity of affordable hybrids not only highlights the Chinese consumers’ desire to adopt greener transportation options but also emphasizes the importance of balancing efficiency with sustainability.

As China’s automotive market continues to evolve, the success of plug-in hybrids showcases the potential for bridging the gap between traditional vehicles and fully electric models. With increasing affordability and growing efficiency, hybrids are playing a vital role in shaping the future of sustainable mobility in the world’s largest automobile market.