IDTechEx reports that the electric vehicle (EV) market encountered difficulties in 2024, especially in Europe. After years of growth, the sector faces challenges such as weakened demand, trade tariffs, and regulatory uncertainty. However, not all electric vehicles face the same issues. While battery electric vehicles (BEVs) have struggled in key markets, PHEV growth in 2024 is strong, with plug-in hybrid electric vehicles (PHEVs) seeing significant growth.

Growth in PHEVs in 2024

IDTechEx’s report, “Plug-in Hybrid and Battery Electric Cars 2025-2045,” highlights that PHEV growth in 2024 is expected to reach over 7 million units, with a growth rate of almost 75%. The report focuses on regional trends, especially how the Chinese new energy vehicle (NEV) market drives global growth in PHEVs. It also outlines the key factors influencing this trend.

Global EV Sales Trends

IDTechEx data shows that most growth in 2023-2024 comes from increased PHEV sales. Research predicts BEVs will dominate the car market by 2045, capturing 75% of the market. Meanwhile, PHEVs will hold just over 5%. PHEV growth in 2024 will peak in new sales by 2028, showing short- to medium-term success.

Cost and Range Considerations for PHEVs

The largest EV component cost is typically the lithium-ion battery. Despite price cuts over the past decade, batteries remain a barrier to cheaper vehicles. PHEVs have smaller batteries, lowering vehicle costs without sacrificing range. They also include a combustion engine, reducing range anxiety.

Environmental Impact of PHEV growth in 2024

PHEVs show inconsistent emissions reductions compared to conventional diesel or petrol cars. A European Commission report found that PHEVs had 267% higher real-world emissions than test figures, especially when drivers don’t charge them frequently. This has led to policy changes, negatively impacting PHEVs’ contribution to OEMs’ CO2 fleet averages. By 2035, all new cars in Europe must be zero-emissions, excluding PHEVs.

Market Dynamics in China

In China, PHEVs and BEVs receive equal government subsidies. Manufacturers like BYD have expanded their PHEV offerings, aiding their success in 2024. With low regulatory preference for BEVs over PHEVs, anticipated lithium-ion price drops will reduce the BEV premium over the next decade.