Auto Industry Shifts Gears: Car Makers Are Leaning Into Hybrids Over Full EVs

 Major automakers are shifting their electrification strategies, scaling back aggressive plans for battery electric vehicles (BEVs) and pivoting toward hybrid and plug-in hybrid vehicles (HEVs and PHEVs). This change is driven by several key factors.

 Cooling EV Plans: EV adoption has slowed in many markets, despite overall growth. Consumers remain concerned about charging infrastructure, higher upfront costs, and range anxiety.

Automakers are also facing profitability challenges, as high battery and manufacturing costs mean many still lose money on each EV sold.

Market uncertainty, fluctuating regulations, and relaxed environmental standards in regions like the U.S. are prompting companies to reassess their EV targets. 

Some dealerships now report oversupply of EVs, indicating that production has outpaced demand.

 

Shift to Hybrids:

Hybrids are increasingly viewed as a crucial bridge technology, offering better fuel economy than traditional internal combustion engine (ICE) vehicles while easing consumers into electrification without requiring extensive charging infrastructure.

There is strong and growing demand for hybrids due to lower operating costs, adaptability to stricter emissions standards, and less range anxiety compared to pure EVs. Automakers are developing flexible platforms that can accommodate ICE, hybrid, and fully electric powertrains, allowing them to adapt more easily to changing market conditions.

 Examples of Strategic Shifts::

--Honda: Has significantly reduced EV investments, focusing instead on hybrids with plans to introduce 13 new hybrid models globally by 2027. Honda now expects EVs to make up a smaller share of its sales by 2030 than previously projected.

 --Ford: Delayed several EV model launches and is planning hybrid versions of all its combustion engine vehicles by 2030. Ford has repurposed an EV plant to build ICE trucks.

 --General Motors (GM): Scaled back EV production targets and announced the integration of plug-in hybrid technology in North America, moving away from an all-in EV strategy.

 --Volvo: While still committed to electrification, it has revised its immediate goals and will continue investing in plug-in and mild hybrids as a bridge to a fully electric future.

 --Toyota: Continues to emphasize hybrids, with plans to increase PHEVs to about 20% of its U.S. sales by 2030, while adjusting its EV targets.

 --Mercedes-Benz: Revised its target, now expecting only half of its sales to be EVs and hybrids by 2030, acknowledging that market conditions will dictate the pace of transformation.

Impact on Critical Minerals & Metals: A shift toward hybrids over full BEVs will affect demand for various metals and minerals:

-Lithium: Demand will remain substantial but grow at a slower rate, as hybrids use much smaller battery packs than BEVs. PHEVs have larger batteries than conventional hybrids but still smaller than BEVs.

-Cobalt: Demand could decrease or grow more slowly, as hybrids may use lower-cost, less cobalt-intensive battery chemistries for their smaller packs.

-Nickel: Demand may also grow more slowly, since hybrids might prioritize less energy-dense (and less nickel-intensive) batteries for cost and space reasons.

-Graphite: Demand will remain strong but less pronounced than with a full EV transition, as hybrids require less graphite per vehicle.

-Rare Earth Elements: Demand for rare earths in electric motors will continue but may be moderated, as hybrids generally use smaller motors than BEVs.

-Copper: Demand will still be significant but less than with a full EV transition, as hybrids require less copper per vehicle and for charging infrastructure.

A market shift toward hybrids could mean reduced per-vehicle demand for battery-specific minerals compared to full EVs, though overall demand will still rise compared to traditional ICE vehicles, just at a slower pace.

Continued demand for Critical Minerals, REEs (rare earth elements), Silver and Copper, will persist, as they are essential for electric motors and wiring in hybrid and full EV powertrains and the overall global transition to electrification.

 SP

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Mining News: www.minestockers.com (Disclosure: the writer is a shareholder in minestockers.com)

 

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