Electric Car or Plug-in Hybrid: Not Either/Or Choice for Carmakers

Posted on October 27, 2011

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As electric cars started rolling out in the past year, major car companies staked a claim on a single specific type of battery-powered car technology. Each argued that its technology—ranging from conventional hybrid to plug-in hybrid to pure electric vehicle—is by far the best approach, and the others are fatally flawed. But with today’s announcement that Nissan will make a plug-in hybrid by 2015, and news earlier this month that General Motors will make a small pure electric car, it appears that major auto OEMs cannot avoid offering a portfolio of hybrid, plug-in hybrids and EVs.

In today’s announcement from Nissan—outlining the company’s five-year environmental plan—CEO Carlos Ghosn said Nissan will launch a plug-in hybrid developed in-house by the end of 2015. By the end of 2016, Nissan will also launch a front-wheel drive hybrid model. By that time, the company will have cumulatively sold more than sold 1.5 million all-electric cars, according to Ghosn.

In other words, Nissan will still be the company known for its EVs, but it will also have hybrids and plug-in hybrids in its portfolio—even if years behind the competition. Similarly, General Motors is likely to be way ahead on production of its extended-range electric cars—a kind of (expensive) plug-in hybrid—before it sells many pure electric cars or conventional hybrids. (GM has been selling conventional no-plug hybrids for years, but has not made much of an impact on that market).

Who knows if Nissan planning to sell a plug-in hybrid will stop company executives from arguing that “real electric cars” don’t have tailpipes? Who know if GM selling pure electric cars will stop General Motors’s executives from saying that electric cars without a gas-engine backup are not “real cars.” This kind of marketing-oriented grandstanding confuses consumers trying to figure out what’s really real, and which plug-in vehicle to purchase.

The Portfolio Players

It will be fascinating to watch Toyota, Ford and Honda in this regard. Toyota has dominated the hybrid market for the past decade, and doesn’t want to let go of that lead. The company will begin delivering the Toyota Prius Plug-in Hybrid in spring 2012, and will also offer a limited number of the new RAV4 EV and a small commuter electric car.

In the coming year, Ford and Honda both will also diversify electric-drive offerings by selling small electric cars—such as the Ford Focus Electric and Honda Fit EV—as well as plug-in hybrid models.

Here’s the good news: In a matter of about five years, you’ll be able to walk into the dealership showroom of any major carmaker and choose the level of electrification that best suits your commute and your budget. If you want to tiptoe into the electric car future, then a conventional no-plug 50-mpg hybrid might be the right thing. If you want mostly electric miles—but have a single car for the family, have regular long commutes, or can’t install home charging—then a plug-in hybrid could work. And if you’re like most Americans—and almost never drive more than 70 or 80 miles in a single day—then a pure electric car could mean never going to the gas station or emitting pollution from a tailpipe.

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