Are electric cars "inferior" to the growth trend of hybrid cars?

Hybrid cars grew faster than electric cars in many major markets last year.

This is a sign that the growth momentum of electric vehicles is running out of steam. But will hybrids eventually overtake electric vehicles?

Hybrid vehicle sales are expected to rise 30% in 2023 in 14 countries, including China, Japan and the United States, to 4.21 million units, according to MarkLines.

Meanwhile, electric and plug-in hybrid vehicles are slower to grow, growing 28% to 11.96 million units. Hybrids will account for 7% of total car sales in 2023, up 2 percentage points from 2021.

Explaining the slowing growth of electric vehicles, Mr. Tomoyuki Suzuki, an expert at financial consulting firm AlixPartners in Tokyo, said that the delay in launching low-cost electric vehicle models on the market is making consumers hesitant about this type of vehicle.

Tesla’s electric vehicle prices, which are four major models, averaged $44,500 last quarter, down 15% from a year ago.

Meanwhile, Toyota Motor offers hybrid models ranging in price from 1 million yen (about $6,700) to more than 20 million yen. The Prius, which was launched last year, starts at 2.75 million yen. Honda Motor and Nissan Motor also offer a wide range of hybrid options.

Convenience is another concern. An electric car with a range of 150km takes at least 30 minutes to charge, 10 times longer than a hybrid or internal combustion engine car. This leaves electric car drivers often facing overloaded charging stations, or leaving their cars idle for long periods of time while they charge.

In addition, the effectiveness of subsidies to boost electric vehicle sales is also fading. Germany ended its subsidy program early last December, and China will end its subsidies at the end of 2022.

Automakers shifting to electric vehicles to take advantage of incentives for electric vehicle production in North America under the U.S. Deflationary Disinflation Act are “reversing course.”

Ford Motor is shifting its spending plans, delaying a plan to invest about $12 billion in electric vehicles. The company’s electric vehicle sales in January fell 11% from a year earlier, while hybrid sales rose 43%.

Rising demand for hybrids is good news for Japanese automakers. Toyota’s electric vehicle sales rose 32% last year to a record 3.44 million units, and are on track to hit 5 million by 2025, the year Toyota aims to have hybrid or electrified versions of all its models sold globally.

Honda saw hybrids increase to about 20 percent of its global vehicle sales last year. The company launched a hybrid version of its best-selling Civic sedan in North America this summer.

Nissan is also considering launching a vehicle with its e-Power hybrid technology in the US by late 2026.

Toyota Executive Vice President Hiroki Nakajima said that with the current charging infrastructure situation, hybrid vehicles will continue to play a leading role, and demand for this type of vehicle will continue to increase until around 2035.

However, demand for electric vehicles is expected to continue to grow in the medium to long term. Electric vehicles and plug-in hybrids currently account for about 20% of the total market in the 14 countries mentioned above.

GlobalData, a British data analytics and consulting firm, predicts that global demand for electric vehicles will double between 2023 and 2026 to more than 20 million units, and to 50 million units by 2035.

Mr. Suzuki of financial consulting firm AlixPartners believes that manufacturers will come up with models that overcome the weaknesses of electric vehicles.

He said automakers are ramping up research and development to improve electric vehicles, such as reducing their weight, to boost their popularity. So the growth trend of hybrid vehicles will not last forever.