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LONDON/BRUSSELS - Remember when plug-in hybrid cars were the go-to technology for the climate-conscious driver? Turns out, they're not good for the environment, according to some experts, and they could be phased out by carmakers in the face of tougher European rules.
EU policy plans for plug-in hybrid vehicles (PHEVs), which contain an electric battery and a combustion engine, could mean the "transition" technology has a shorter lifespan than envisaged by some leading automakers.
Draft green finance regulations would ban manufacturers from labelling them as "sustainable investments" beyond 2025, potentially deterring investors. Meanwhile planned rules on emissions of pollutants like nitrogen oxides could increase the cost of producing these cars.
The aim of such reforms is to speed the transit to fully-electric vehicles and meet climate goals. Yet they would mark a shift from existing EU policies, such as CO2 standards, which have treated hybrids on a par with all-electric cars and helped spur the auto industry to invest tens of billions of euros in the technology.
Some carmakers had envisaged selling hybrids until at least the end of this decade as a bridge to fully battery electric vehicles (BEVs) - although their shift away from the technology looks to be underway.
An analysis of car production plans in Europe through to 2028 compiled for Reuters by AutoForecast Solutions (AFS), which tracks industry production plans, shows only 28 PHEV models versus 86 BEV models. That is a turnaround for an industry where PHEV models on the market have outnumbered BEV models every year since 2015, often significantly.
Now some carmakers fear the EU could prematurely cut short that transition. They warn upcoming rules could make it hard to sell PHEVs in European markets in just a few years' time, despite consumer concerns about the range of fully electric cars and a lack of charging infrastructure.
"It's crazy to do this by 2025 because effectively you kill demand today," said Adrian Hallmark, CEO of British luxury carmaker Bentley, a unit of Volkswagen, referring to proposals to not classify PHEVs as sustainable investments. He plans to sell PHEVs until 2030 before going all-electric.
"For most people, a battery electric car is not yet practical," he told Reuters.
A European Commission official declined to comment on the green finance rules specifically, but said its policies were "technology neutral", adding that PHEVs were "a transition technology towards zero-emission mobility". To reach an overall climate neutrality target in 2050, nearly all cars on the roads must be zero emissions by that time, the Commission added.
The rules, which are still being drafted, come against the backdrop of a shift in the position of some leading environmental groups which are pushing to dispel PHEVs' green credentials and do away with their subsidies.