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Are PHEVs as Expensive to Manufacture as Battery Electric Cars?

Carrying half a metric ton of batteries just to have an average range is not the only problem with battery electric vehicles (BEVs). They also take a long time to charge, and battery packs cost a fortune to replace. An alternative to that scenario would be plug-in hybrid vehicles, but what if they cost as much to manufacture as BEVs?
PHEVs would cost as much to manufacture as BEVs, but why so many carmakers still want to sell them? 15 photos
BYD SealBYD SealBYD SealBYD SealBYD SealBYD SealBYD Seal prices2023 Mitsubishi Outlander PHEV2023 Mitsubishi Outlander PHEV2023 Mitsubishi Outlander PHEV2023 Mitsubishi Outlander PHEV2023 Mitsubishi Outlander PHEV2023 Mitsubishi Outlander PHEVPHEVs would cost as much to manufacture as BEVs, but why so many carmakers still want to sell them?
That is what John McElroy learned at the SAE North America International Propulsion Conference, possibly as the mediator of the panel “ICE vs. xEV,” which took place on November 17. Sean McElroy shared that in the video embedded below. In his words, a PHEV with a battery pack large enough to make the car travel 50 miles (80.5 kilometers) or more costs “about the same to manufacture as pure battery electric vehicles.”

Considering the massive differences a Mazda MX-30 and a Lucid Air present, even if both are BEVs, that sound a bit generic. A 35.5-kWh battery pack will cost much less than a 118-kWh unit. That said, a PHEV will possibly have around the same cost as an EV with a smaller battery pack, but we would have to confirm that with the person the McElroys heard that from.

That makes sense. Apart from having a battery pack, a PHEV also has all the gear a combustion engine will need to move a car when the stored electricity to power electric motors ends. To make matters worse, “automakers can’t get the pricing they need to cover those costs.” If that is correct, they would be selling those models at a loss. Yet, at this point, several carmakers prefer to sell PHEVs instead of BEVs.

We’d love to discuss this with car companies, but most will treat this as sensitive information and will prefer not to disclose any info on that. That said, we can only speculate about the reasons for that to be the case.

The first reason is that using an 18.1-kWh battery pack is cheaper than buying one with 35.5 kWh. The former is what the Toyota RAV4 Prime uses to offer a pure electric range of 42 miles. The Polestar 1 has 34 kWh arranged in three battery stacks but is no longer for sale. It was the only PHEV with more than 50 miles of range for sale.

With smaller battery packs, carmakers can sell more vehicles and rely less on battery manufacturers. PHEVs could eventually work only with their combustion engines if it were necessary to recall the batteries, as was the case with the Hyundai Kona Electric and the Chevy Bolt EV. Removing them would be better if they pose any danger, even if the replacements take a while to manufacture.

Finally, convenience is understated: customers are willing to pay for it. Electric ranges enough for people to do whatever they need in a day and get back home without having to charge would be perfect for most people to avoid gas stations most of the time. When they need to make a road trip, being able to use the combustion engine will save them a lot of time and prevent them from getting stranded if there are no chargers on the way. Between a PHEV and a BEV that cost the same to manufacture, some clients may prefer the machine that travels the furthest – and in less time. How much longer they have the right to decide that is what we should be debating right now.

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