Why hybrid cars aren't dead (despite what you may have heard)

Drivers may have lost interest in the most fuel-efficient cars because of low gasolene prices, but don't kick hybrid vehicles to the curb just yet.

In fact, their future looks more certain than ever after Swedish automotive brand Volvo announced that it would stop launching conventional gasoline engine vehicles after 2019.

Volvo said all of its new models would be electric cars, hybrids, or mild hybrids, which are gasolene vehicles partially powered by battery-driven motors.

Despite plummeting sales for the world's most popular hybrid, the Toyota Prius, and a shaky market for electric cars, Volvo is moving ahead in a real-world example of how foreign regulations are exerting more influence on the US car market.

The industry is still hoping that President Trump will weaken US fuel economy standards amid low gasolene prices that have undermined the appeal of fuel-efficient vehicles. That in turn has driven up demand for crossovers, sport-utility vehicles, and pickup trucks.

But automakers operate on a global scale and like to develop models they can sell throughout the world to spread out costs and maximise revenue. With China and European regulators pressing for fuel-efficient vehicles to combat air pollution and climate change, automakers like Volvo may have no choice but to embrace hybrids until lower battery costs make pure electric vehicles more affordable.

Anticipation of stricter emission standards in Europe "is one of the reasons we are making this announcement," Volvo global CEO Hakan Samuelsson said in a press conference.

Volvo is owned by Chinese automaker Geely, which is under pressure to deliver more fuel-efficient models in its home market.

 

'Out of step'

 

"This is where some of the talk about going backward on the fuel economy emission standards is out of step with the rest of the world," Autotrader.com analyst Michelle Krebs said.

For car buyers, it could lead to a cleaner environment, but it could also lead to higher prices to accommodate the extra technology. Samuelsson declined to discuss pricing.

But drivers won't necessarily have to compromise on drive quality.

"Hybrid technology is now mature enough that it is smooth and fuel-efficient but also can be tuned for fun and that's what people need to remember," AutoPacific analyst Dave Sullivan said.

Even so, electric cars and pure hybrid vehicles aren't resonating for Americans right now.

Prius sales fell 18.3 per cent in the first half of 2017 to 55,100 units. Sales of the Ford C-MAX hybrid, last year's second most popular pure hybrid, plunged 37.3 per cent to 4,415 in the first six months of 2017.

Part of the problem is that hybrids evoke a certain image in the minds of consumers.

"Everybody has a stigma when they're stuck behind a Prius that's 10 miles under the speed limit that's what's kind of ruined the view of hybrids," Sullivan said.

But Volvo and other automakers are trying to remake that image. The automaker said its goal is to sell one million electric or hybrid cars by 2025 and to lower its carbon footprint.

Kia recently rolled out a small hybrid crossover called the Niro, while Hyundai introduced a model called the Ioniq that will be sold in hybrid, plug-in hybrid and electric versions.

General Motors was the first to deliver a mass-market, long-range electric car with the Chevrolet Bolt. And Ford recently announced plans to deliver hybrid versions of the F-series pickup truck and Mustang performance car.

Automakers are under pressure to meet efficiency targets, particularly in Europe, where diesel vehicles are falling out of favour following Volkswagen's emission scandal. That event raised concerns about nitrous oxide pollutants.

Samuelsson said Volvo will no longer develop new diesel engines. A small engine with a mild-hybrid system is "a very attractive alternative" to meet regulatory requirements, he said.

Still, he contended that globally, people are demanding electric vehicles.

"Electric cars are seen as very attractive cars, and we have to listen to our customers," he said.

Don't wave goodbye to gasolene just yet, though. Many of the hybrid models Volvo is developing won't get substantially greater gas mileage than conventional engine models.

"There are some deceptive headlines - they are not going out of the gasolene engine business, at least not anytime soon," Krebs said.

- TNS