Contrary to a lot of early expectations, plug-in hybrids (PHEVs) haven’t caught on in Australia. Consumers are bypassing them for pure EVs, or sticking with regular hybrids and other combustion vehicle types.
On paper PHEVs seem like a smart concept. Enough electric range for daily commutes plus the reassurance of a combustion engine for longer trips that can take over when charging is scarce – something any regional Australian is probably familiar with.
These middle-ground vehicles, a technological bridge between a Prius-style regular hybrid and a Tesla-style EV, have also proven quite popular in Europe, China and the US, helped along by tax credits and government grants.
Australians have purchased 5,500 PHEVs in 2023 to the end of August, which is up 35%. However, don’t get too carried away with that figure. Both EVs (56,922 sales, up 292%) and regular hybrids (59,593, up 8.9%) have outsold PHEVs by more than ten to one.
Of the alternative fuel vehicle types, only hydrogen fuel-cell has achieved lower take-up.
So why haven’t PHEVs worked here then? And is there any chance the proverbial worm will turn? Or has the ship sailed rendering these a technological cul-de-sac? Here are some key reasons based on research as well as feedback from the car industry and consumers.
Price
They’re just really expensive. A combination of costly drivetrain duplication and the need to amortise development costs ensured that.
Take the top-selling PHEV models in Australia: the MG HS and Mitsubishi Outlander.
The HS Excite Plus EV costs $48,990, which is $14,000 or 40% more expensive than the HS Excite petrol. An Outlander ES Plug-In Hybrid AWD costs $61,730 drive-away, $20,000 or 48% more expensive than the Outlander ES petrol FWD.
Even with the cost savings you’ll never come close to making that money back in fuel savings. The sums just don’t work.
Complexity and consumer knowledge
Combustion and regular hybrid vehicles are simple: Fuel goes in, exhaust emissions come out, car moves. So too are full EVs: Charger goes in, zaps up battery, car moves.
But PHEVs furnish you with both a plug point and a fuel tank.
This means they’re quite complex machines that need as much servicing as any other combustion vehicle, with more to potentially go wrong over time. Plus will there be future demand, from a resale perspective? And how do you explain their operation pithily to punters?
From an ownership perspective, you need to charge up that battery to get the best from them, but also have to keep visiting the servo… Studies have shown that plenty of people don’t charge them as often as they should, meaning they’re just driving a normal hybrid with lots of added battery weight for no reason.
There’s an axiom about being a jack of all trades and master of none…
Choice
The lack of consumer interest has created a self-fulfilling prophecy where OEMs elect not to bother, of if they do bother they import a tiny number of units (cough, Kia Sorento).
Toyota for instance doesn’t import the technology here, while Volkswagen has backed away from a few false starts. Moreover the likes of Hyundai, Kia and Mercedes-Benz have stopped offering certain PHEVs in their line-ups after slow sales.
Right now there are about 30 PHEV models made by 16 different manufacturers (Audi, BMW, Cupra, Ford, Jeep, Kia, Land Rover, Lexus, Mazda, Mercedes-Benz, MG, Mini, Mitsubishi, Peugeot, Porsche and Volvo) on sale in Australia.
But there are a lot more EVs proliferating now (nearly 50 models from 24 brands and growing fast), and more to come. The gap will widen, and keep widening, unless something major changes.
Unfriendly policies and lack of attention
Yes, PHEVs are covered by the fringe benefits tax exemption for now, but for many salary sacrifice lease plans the higher maintenance costs and fuel bills make them less appealing than a pure EV more often than not.
Moreover, PHEVs are not covered by as many State and Territory rebates or tax breaks, and in the case of Victoria owners get a double whack by having to pay a road user charge as well as petrol excise – something ICE, hybrid and EV drivers alike don’t need to do.
Given much of the success of PHEVs elsewhere comes down to things like rebates or company car tax breaks, the relative lack of support in Australia is clearly a handbrake.
Future?
Companies are still having a red hot crack. Mitsubishi is spending big on its Russell Coight Outlander PHEV campaign, and Mazda just launched the CX-60 PHEV. Maybe it can sprinkle some of its famous magic dust onto the technology in Australia?
Plus other brands remain committed, for example Cupra Australia head of product planning Jeff Shafer, who told us: “For the next decade I think PHEVs are going to be part of the mix, and a really reasonable step for people to take if they aren’t ready for full electric”.
Moreover, once Australia has fuel efficiency standards setting OEM CO2 targets from 2024 (at this rate), then perhaps manufacturers will push them harder, at keener prices, to cancel out their higher-emitting vehicles. On paper PHEVs are very green after all.
As more and more plug-in hybrids arrive with circa 100km pure electric driving range, another key reason not to buy them is cleared off. And once the PHEV utes arrive (Ford Ranger confirmed for 2025), it will open up a whole new, and potentially massive, audience.
Industry sentiment
We straw-polled Australian car industry insiders for their takes on why PHEVs weren’t popular and the common themes were: Price, weight and complexity, consumer misunderstandings, relative lack of tax breaks or rebates, EV improvements making them better bets, and fears over resale values given it’s seen as a bridging technology.
In short, right now it seems like the Tesla Model Y or a Toyota RAV4 Hybrid remain preferred to an Outlander PHEV. The former because it’s cheaper, simpler and ultimately greener; the latter because it’s cheaper to buy and overall to own all factors included, and easier to operate.
If we accept that PHEVs are a bridging technology, then the bridge needs painting and strengthening, lest it simply topple.
