This is Round Table.
In a world where cars are caught in an electrifying tug of war, hybrid electric vehicles are the peacemakers.
With one foot in the gas lane and the other on electric highway, we discussed how these hybrids are turning heads and changing hearts.
And imagine you're a lighthouse keeper.
What would your guiding light look like for your child?
Would it be a bright beacon of encouragement or perhaps a cozy glow of support?
We discussed the lighthouse parenting style and how it allows kids to navigate their own waters.
Coming to you live from Beijing, this is Round Table.
I'm He Young. For today's program, I'm joined by Steve Hatherly and Fei Fei in the studio, first on today's show.
Consultancy Ro Motion found that nearly 60 percent of global electric car sales occurred in China, underscoring the country's leading position in the EV market.
Interestingly, plug -in hybrid electric vehicles, or PHEVs, have become the new darlings among Chinese consumers, achieving a 51 percent market share in July.
Similarly, the United States is witnessing a significant rise in hybrid electric vehicles.
American Public Media's marketplace reported that hybrid sales increased by 46 percent and plug -in hybrid sales surged by almost 70 percent in early 2024, as consumers seek more versatile and practical options and concerns about fully electric vehicles.
Today, we delve into the environmental implications, technological advancements, consumer sentiment, and the dynamic landscape of the EV industry.
So guys, could you please explain what is a hybrid EV and more specifically plug -in hybrid electric vehicles, or PHEVs?
I hope we don't upset or put off the enthusiasm of listening to this show of our dear listeners.
Because there are a lot of concepts and a suit of alphabet, so to speak.
Before we begin any discussion, if you find this discussion confusing because we're talking about plug -in hybrid electric vehicles versus hybrid vehicles, all of this terminology is confusing for everyone.
So we're going to try our best to break it down today.
Yeah, so I think the term of hybrid vehicles are not really new.
We've heard about hybrid vehicles for a number of years now.
But now traditional hybrid vehicles are basically vehicles that can use both fossil fuels and also some part of electric.
But most of the traditional hybrid vehicles rely still heavily on fossil fuels.
But now we have plug -in hybrid electric vehicles, so from the name of it, which PHEVs, they are mostly powered by electricity.
But then at the same time, they sort of have a backup engine that can be filled by fossil fuels.
So when you, for example, can't find a charging station and you need to drive or you need to drive really long distances and you fear that the electricity, the range is not going to be enough, then you can switch on that backup engine as a way to drive that long distance.
So that's, I think, a simpler way for people to get into what is exactly a plug -in hybrid vehicles.
And also there are another vehicle called Extended Range Electric Vehicles, which are EREVs.
And this is basically saying that the vehicles are still powered by electricity, but they can sort of have this machine that are able to extend the range of the batteries so you don't have to worry or have the anxiety around range.
Yeah, yeah. And range anxiety is a real thing for EV drivers.
How far can I go on this battery charge?
You think about your smartphone.
When you see that battery on your smartphone, get down to around, well, for me, it's around five, four percent, then I start to panic.
Some people start to panic at around 50 percent or something like that.
So I guess it's the same thing for cars.
Both of the ones just mentioned, the PHEVs and the EREVs are both equipped with charging interfaces, but the main difference is that PHEVs have an engine that can directly drive the vehicle if you so choose to go that route.
EREVs have an engine that does not drive the wheels directly.
It acts as a generator to charge the battery or provide the power to the electric motor, which then drives the vehicle.
And there are companies, plenty of companies representing this type of driving experience and this type of technology.
Right. And it seems like at the moment, PHEV is definitely the winner out of all hybrid electric vehicles.
And here are like so many things to compare, and I'd like you guys to jump in and sort of help me to weigh the options of, oh, there's the hybrid EV versus fully electric EVs.
And also now you've got these really popular PHEVs and then that versus hybrid.
So how do you know as a consumer which one is right for you?
But it's really interesting is that the numbers seem to have proven that PHEV is at least at the moment the ultimate winner.
But guys, feel free to, you know, talk about the pros and cons.
Sure. Advantages and disadvantages of them all.
Let's start with the traditional hybrid vehicles.
The advantages and you're right, there are advantages and disadvantages to all of these different type of cars.
Fuel efficiency is the big advantage for traditional hybrid vehicles.
They use an electric motor at low speeds and also during starts and then the gas engine and the electric motor, they work together in tandem at high speeds, and that helps to reduce fuel consumption.
In my experience driving an electric vehicle, I just mentioned that the electric motor is used at low speeds and when the car starts, when you start to go, you'll, I noticed that.
I don't know if that's true in every electric vehicle.
I'm assuming it's not, but the one that I drove, when you press on a gas engine accelerator, there's an immediate response from the vehicle.
There's no lag. But the electric vehicle that I drove, when you press on the accelerator, there's a little bit of time between when the car knows what it's supposed to do versus when you actually press on the accelerator.
Sorry, so you're saying that, is this combining traditional combustion versus high?
Yeah, but in a hybrid vehicle, the electric motor will be used at lower speeds.
See, that's one of the interesting, well, it's a selling point apparently, if you're into speed, fast and furious, especially some of those, what are those people called adrenaline seekers?
Junkies. The minute when you hit the gas pedal or the accelerator, you want the car to immediately race out and then apparently that is something that electric cars can do far better than traditional combustion.
If you get into your higher end, even race car, sports car, electric vehicles, yeah, that's not even an issue.
Also with your traditional hybrid, there's no external charging.
That can be considered an advantage as well because it can be difficult to find a spot to charge your vehicle.
Also the stability and the reliability of the cars as well with relatively low maintenance cost too.
Disadvantages, particularly here in China, with a traditional hybrid vehicle, you cannot obtain a new energy license plate.
The green plates I think that are represented here in China.
So in some cities, they can't enjoy the incentives for new energy vehicles.
Right. And also, either so let you know if you don't live in China, that having this green number plate really matters for people because usually there's a long line waiting to get the number plate and without the number plate, you can't drive your car.
So with the green option, at least since 2009 when these preferential policies were rolled out targeting and also promoting new energy vehicles, you get the fast track and then that really attracted a lot of people to buy the new energy vehicle as opposed to the traditional gas powered cars.
I was looking at a story from cleantechnica .com and it talked about the fact that China rolled out these green new energy license plates back in around 2017 when the full rollout came out.
And it was so popular at the time it was oversubscribed and back in 2017 there were 80 ,000 people in line for the 2018 license plates.
So they said that if you applied in maybe late 2017, you probably wouldn't have gotten your license plate until 2019.
I don't know if it's still that competitive or not, but it was at the time.
And also, the market at the time, the Ministry of Public Security announced that the number of new energy vehicles had reached 1 million in China and among the over 1 million electric vehicles at that time.
825 ,000 were pure electric vehicles and only 193 ,000 were plug -in hybrid vehicles.
Here we are, what, seven, eight years later and we're talking about the popularity of plug -in hybrid vehicles.
It took a while but that time seems to be now.
Yes, and I think the reason for that is because in the starting stage when China's trying to promote electric vehicles, it mostly happened in big cities.
For example, in Beijing, Shanghai and Shenzhen, where relatively speaking we have a more developed network when it comes to charging facilities.
But now after seven years now that a lot of the new consumers are more from third or fourth tier cities, smaller cities here in China and even in rural areas where they don't really have a very extensive charging network.
But they're still thinking of getting electric cars and then these plug -in hybrid vehicles would be their choices because they can switch to both engines and then they can still use the incentives and then at the same time they don't have to be worrying about not finding a charging station.
Yeah, well let's talk about then some of the advantages of the plug -in hybrid electric vehicle or the PHEV.
One of the big advantages, energy efficiency and environmentally friendly.
You can operate the PHEV in pure electric mode if you want to and that achieves zero fuel consumption and zero emissions.
Now I'm guessing you probably wouldn't find a person who bought a PHEV and then only uses it as an EV because you have both available to you so why would you not use both?
I was reading a blog post from a driver of a PHEV and they say one of the big advantages is that if you're doing your daily commutes within the city, say within Beijing, and your commute is say 10 kilometers or something like that, then you can use the battery and only the battery in the car to do your
city driving from Monday to Friday.
Then if you want to go out for a weekend trip and you're going a couple hundred kilometers or something like that, then your gas engine kicks in as well and you can use both.
So that's one of the big advantages of the PHEVs.
But then I think one of the disadvantages is because of the technological edge with this kind of PHEV is that it can be priced higher compared with other models, especially because of the vehicles are more often equipped with larger batteries and have dual power systems and the weight is also a bit
heavier compared with other vehicles.
So sometimes we can hear consumers complain about these kind of vehicles are more expensive than, say, traditional hybrid cars or just EVs, regular EVs.
Yeah, it's interesting, isn't it?
Because when you talk about the electric vehicle market, this is almost a market within the market itself, isn't it?
And when you get into the market within the market, you can find price differences there.
I mean, you can find price differences between typical electric vehicles and gas vehicles, but then you can find price differences here as well.
So, for example, within the same model category, a pure electric car is typically higher than your plug in hybrids.
And that's because pure electric vehicles require a larger capacity battery, like you said, and they provide longer ranges, yes, reducing that anxiety, that battery anxiety.
But still, battery costs are relatively high.
Comparing the price of two vehicles for BYD, we'll use that as an example, for their PHEV version of one car, it's $135 ,000 to $189 ,000 yuan.
That's about 19 ,000 to $26 ,000 US dollars.
But for the pure EV version, you're looking at $169 ,000 to $209 ,000 yuan, which is about $24 ,000 to $29 ,000.
So it's not a massive price difference, but it's enough of a price difference, I think, when the economy is not so great for car buyers, because a few thousand dollars is a lot of money out of your pocket and into somebody else's pocket.
And that's why they say when you're considering which of these vehicles you want to buy, you really have to do some math and you really have to figure out which one is best for you.
Right. So are we saying that for the fully electric vehicles, usually that is a bit more expensive in the electric vehicle market because it has a bigger battery, it requires more high tech to go into it and therefore actually the upfront price of getting it could be more expensive?
There's also that there's that and then there's the other costs as well.
For example, insurance, especially when you compare to a gas vehicle, these batteries that are in the cars, they are really large, right?
And if these batteries get damaged, I read an article about this maybe a year or two ago, insurance companies, you have to pay more for insurance because if you have an accident, hopefully you don't, but if you do and that battery gets damaged, oftentimes you have to scrap the whole battery.
So the bigger the battery, probably the more the more insurance you're going to pay as well.
That's an interesting aspect of the EV car ownership, which I believe we might have talked about this last year, but I know this is still sort of an afterthought for a lot of people that, you know, what do you do with the battery?
How do you retire the battery?
And then how does how do you prolong the longevity of your EV once the battery becomes an issue and how to retire it and all that stuff.
And that's going to happen in droves of cars in the coming decade.
But that's not what we're talking specifically today.
Still, we're looking at, you know, like for some folks who are trying to decide whether they want to switch their cars into an EV or what kind of EV or whatnot is an environment also something that people could be thinking about because one of the big selling points.
Yeah. Did we mention that, you know, with the with the EVs when you charge the cars, actually it's cheaper than filling the traditional combustion car with fuel.
And also like it's supposed to be a greener option as opposed to reduce pollution and all that stuff.
How do the P H EVs, hybrid EVs, these different options fair in that department?
Well, to your point about how people want to have a positive impact on the environment and how everybody wants to reduce their carbon footprint.
I think it's true. They did a survey in the United States in 2023 and they found that four in ten of people asked something.
I found this kind of funny.
They asked them, are you likely to consider an EV as your next vehicle purchase?
And four in ten said somewhat likely.
I don't even know what somewhat likely actually means, but I guess it means they'd at least think about it.
And then within that group, seventy two percent, and this is to your point, seventy two percent said they would consider it because of the environment.
And seventy said seventy percent said they would do it to save on gas money.
So, yeah, people do care about the environment with electric vehicles.
That seems to be the thing that people think about first is the the reduced carbon footprint from the driver themselves.
But I think if we are trying to sort of make it mainstreaming the EVs to mainstreaming the EVs, only relying on people's good bill is sometimes not enough because we are asking people to take their money out of their pocket and we need some incentives to sort of motivate them to sort of get into the new
energy vehicle market instead when they are especially for people who are still driving the traditional fossil fuel cars.
And I think P -H -E -V can be a good product for that face, for that face that they are thinking about the both sides, but not really sure because they can try some of the electric, electrical function with a vehicle and then not having to worry about batteries and range and all that.
Yeah. And also given the fact that P -H -E -Vs in China, or at least in most Chinese cities, it requires, it can acquire the green new energy license plate, which is definitely a big plus because the queue could be rather long.
Yeah. And sorry to interrupt.
The benefits for individuals to buy a new energy vehicle here in China.
One is a reduction in vehicle purchase tax subsidies based on the purchase price.
So the more expensive the car, the more money that you'll save for new energy passenger vehicles priced under 150 ,000 yuan, that's about 21 ,000 dollars.
The subsidy is at 10 percent of the ticket price.
For vehicles more expensive between 150 ,000 and 300 ,000 yuan, the subsidy is 8 percent and then over 300, it's 6 percent.
So it dwindles. It dwindles the more expensive the car.
I guess they have to arrange it like that.
Otherwise they'd be saving even more money, right?
Also, local governments have introduced unique regional subsidies and incentive policies.
There are subsidies on trade ins too.
So there's lots of reasons here in China for people to go EV.
Yeah. And it's proven to be a very successful policy move as the numbers do prove the fact.
And we've seen that not only is the percentage of EV ownership in this country or in terms of numbers as well.
It's increasing. And it is the biggest around the world.
Yeah. Also, I think what's really great about China's EV market is that, yes, you can argue, hey, why should I go EV if the traditional gas powered cars are cheaper?
But even for the budget conscious people in this country, they see that there are plenty of really decent cars at a really affordable price as options in the EV market.
And I think that's one of the key reasons why it's driving people to EVs.
But as we've established from the beginning of this discussion, that PH EVs is a hit, not only in China, in the US as well.
What do you think from a broader perspective is driving this change in people's purchasing decision?
Incentives. In the US as well?
Yeah, I think so. You made a great point.
It's that people want to help the environment.
Right. And you want to feel good about the purchases that you're making and you want to reduce your own carbon footprint, as I said before, if it's convenient for you.
And I think that's a big deal when it comes to individuals helping out the environment, doing things like free parking would be a big incentive to get people to make a purchase for an EV.
Some states you asked about internationally in America, Arizona, Hawaii, Nevada.
They offer free parking also in Norway and Sweden and Japan.
And according to what I read here in China, there are free parking locations as well, although I don't have information on specifically where those are.
Access to bus lanes sounds like a minor thing, but it's another incentive.
So if you get happening in the US, it's happening in the US is not happening in China.
I know why. But if you take simple, seemingly simple things like that and then you combine them with, you know, subsidies of 10 percent or more on a new purchase and tax breaks and things like this.
That's the type of thing that could be the tipping point for a potential customer to say, yes, I am willing to go in that direction.
Yes. And also, I think it sort of promotes a very healthy cycle for the development.
For example, here in China, yes, of course, the market of EVs are sort of encouraged by incentives and subsidies.
But then we start to see automakers emerging in the markets.
And they came out with very sort of very attractive design with their new models.
And now young people themselves without the incentives even want to buy new energy vehicles simply because, you know, the experiences and also the design makes them attractive products regardless of, you know, carbon footprint or what kind of engine it drives.
It's growing, though.
I mean, globally, globally, new energy vehicle, the market.
It reached sixteen point one percent to January to August of this year.
But pure electric vehicles still lead the way.
Ten point four percent represented in sales versus the plug in hybrids at only five point seven percent.
But as we looked at the twenty seventeen numbers versus the numbers now, it's still not a market leader.
But the plug in hybrids are coming on strong.
Yeah. And in this world where every mile counts, hybrids are hitting the sweet spot between gas and electric like finding the perfect balance in a tight rope act as consumers embrace this versatile ride is clear that the journey toward greener rows is just getting started.
And I guess people still need a little bit of time and education.
I mean, do your homework for sure to figure out if you're going to buy one of these vehicles, do some math, figure out which one is best for you because it's not a one size fits all.
Definitely. And also car makers need to develop in technology as well for people to get on board.
