Plug-in hybrid electric vehicles (PHEVs) are the fastest-growing eco-friendly vehicles in the global market. As the prolonged slowdown in electric vehicle (EV) demand and delays in charging infrastructure continue, PHEVs have emerged as a practical alternative due to their reduced charging needs. Equipped with both an internal combustion engine and an electric motor, PHEVs allow the motor to actively engage in driving, offering up to 100 km on electric power alone and an additional 1,000 km with the engine. This results in reduced charging inconveniences compared to pure electric vehicles, which typically have a range of around 700 km.
Just two to three years ago, PHEVs received little attention due to their limited electric range of about 30 km and a price premium of over 10 million won ($7,500) compared to regular hybrids. However, advancements in technology have led to the introduction of models with over 100 km of electric range, making them suitable for both city driving and long-distance travel. Chinese automakers like BYD have also launched PHEVs priced around 20 million won, enhancing affordability.
According to the Korea Automobile and Mobility Association (KAMA) on Sept. 22, about 2.59 million PHEVs were sold globally in the first six months of this year, a 57% increase from 1.65 million last year. In contrast, sales growth for pure EVs and hybrids was only 8% and 17%, respectively. PHEV sales, which accounted for one-third of EV sales in the first half of 2022, have now reached half.
Demand for PHEVs has surged in markets like China and the United States, where vast land areas necessitate long driving ranges. In China, PHEV sales nearly doubled to 1.91 million units, representing about 74% of the global PHEV market in the first half of the year, up from 62% last year. The U.S. also saw a nearly 20% increase in PHEV sales, reaching 160,000 units.
PHEVs were previously priced higher than internal combustion vehicles and had smaller battery capacities compared to EVs, resulting in lower subsidies and reduced competitiveness. However, with Chinese firms actively developing PHEV technologies, prices have begun to decline. BYD introduced the Qin L and Seal 06 models in May, both priced around 20 million won and featuring an improved PHEV system. In July, Chery Automobile announced that its PHEV model, the Fulwin T10, set a Guinness record by traveling over 2,100 km without charging or refueling.
Global automakers are increasingly focusing on PHEVs as a transitional solution to EV adoption. General Motors, one of the U.S. Big Three, discontinued its PHEV lineup in 2019 but has since revised its strategy, announcing a new PHEV model for 2027. Supercar manufacturers, traditionally slower to adopt electric vehicles, are now prioritizing PHEV releases over pure EVs. Lamborghini unveiled its first PHEV, the Urus SE, in April, while postponing its full transition to EVs until after 2028.
PHEVs have also emerged as a viable alternative to EVs in Europe. As subsidies for both PHEVs and EVs decline, PHEVs become more affordable without government incentives. In Germany, where EV subsidies were abolished at the end of last year, PHEV sales increased by nearly 14% in the first half of this year, while EV sales fell by 16%.
