German legacy automaker Volkswagen revealed plans to roll out more plug-in hybrid electric vehicles amid growing customer demand.
According to the Chief Executive, the increasing popularity of PHEVs is largely because demand for battery-electric vehicles (BEVs) has hit a “plateau.”
VW to launch more PHEVs to meet rising customer demand
During the Financial Times’ Future of the Car conference in London on Wednesday, Volkswagen brand CEO Thomas Schafer asserted that the all-electric vehicle market is currently experiencing a plateau.
Simply put, the VW boss believes that demand for BEVs has started to slow down after a period of strong growth over the past years.
CEO Schafer received a question about the brand’s investment plans for hybrids during the event. According to Autocar, Schafer stated that the answer would be “Forget hybrids, it’s expensive technology, it’s not worth it” if he received the same question in 2023.
However, the recent market changes have also altered CEO Schafer’s stance on hybrid vehicles.
“Within the last six months, all of a sudden everyone wants hybrids.”
Volkswagen CEO Thomas Schafer
PHEVs emerge as a viable short-term alternative
The United States and the European Union have both passed new legislation to cut carbon footprints in their respective transportation sectors.
These legislations basically require automakers to reduce the emission generation of their light-duty vehicle offerings.
The EU will ban new ice-powered vehicle sales from 2035, while the US will impose the new tailpipe emissions rules starting with the 2027 model year and gradually get stricter through the 2032 model year.
Therefore, relying on hybrid and plug-in hybrid technologies seems ideal for automakers, at least in the short term, while they wait for BEV demand to rebound.
“It’s a bridge technology. While battery-electric drive is plateauing out a bit at the moment, we still need this transitional technology.”
Volkswagen CEO Thomas Schafer
Despite the current focus on hybrids, the VW boss remains “absolutely sure” of an all-electric future.
Potential challenges
Volkswagen may have a hard time to match the growing demand for plug-in hybrid models in the US.
As of today, the brand has no hybrid or plug-in hybrid offering in the US market. Therefore, it leaves the customers only two options: the all-electric ID. 4 or gas-powered counterparts. Nonetheless, the lack of such models may change soon as the country’s new tailpipe emissions rules take effect.
Volkswagen’s sudden pivot to plug-in hybrids mirrors recent moves from other major OEMs like Ford, Nissan, Hyundai, and Toyota. They now aim to expand their HEV and PHEV lineups in the following months to meet the growing customer demand and stay competitive in the automotive market.
