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EV or Hybrid? What the Next Decade Holds

by Index Investing News
October 16, 2023
in Economy
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Physics and material sciences are awesome. I have no doubt that by the end of this century decade (if not sooner), we will develop technology to use light(er)weight, high-density batteries that will allow a 1000-mile driving range, ultrafast recharges, with massive improvements in safety and autonomous driving.

I probably won’t be around to see the end state of this evolution, stuck as I am in the current timeline circa early 21st century.

The switch from horses to cars took place almost a century ago. All of us born after WW2 did not have to suffer through a transition period of unreliable cars, sporadic fuel sources, and terrible roads. The early adopters of automotive innovation in the 1920s and 30s were the road warriors who did. They paved the way for the next generation of drivers.

We are currently in the midst of another massive technological shift, a transition from internal combustion engines (ICE) to electric vehicles (EV). My personal experiences with EVs have been great – they are wicked fast, with gobs of torque, delivered in a linear fashion. Total cost of ownership is much lower.1

As big a petrol-head as I am, I have no doubt that the future is electric.

But this transition from ICE to EV won’t be complete until three issues get resolved. Charging infrastructure and range issues are well known. It’s a bit of a Chicken and Egg problem: ICE cars have an enormous infrastructure built out over a century. Unless you are traversing one of a handful of deserts around the world, gas vehicles require no prior thought before a long trip – down the coast or cross-country. It’s possible to do so with EVs, but they require more planning and thought – and if surveys are to be believed, more than a little range anxiety – before the trip is completed.

That’s only part of the problem. There are other concerns, primarily build quality and price. Tesla has brought down prices a lot, but speak to an honest owner, and they will share a laundry list of issues (See this board as an example). There are lots of great well-made EVs, but they come at a relatively high price: EV makers Lucid and Rivian, as well as Porsche, Audi, BMW, and Mercedes. These are great, and they better be, ‘cause they cost a lot.

My experiences with the Ford Mustang Mach-E and F150-Lighting make it clear that car makers can build high-quality EVs at reasonable prices; whether the companies can make any money on these is a different question. Hyundai/Kia and VW also have found a good balance between price and quality. This is to say nothing of the many new EV manufacturers in China.

Among all of these encouraging signs of improvement, we still have a bit of a quandary. We are probably a decade away from when the price and quality differences between ICE and EV vehicles disappear. And even as that transition occurs, Gasoline ICE engines continue to get better.

The solution I have embraced is the Plug-In Hybrid (PHEV). While I am still playing around with pure electrics as a fun local recreational vehicle, the daily driver getting the most use is a PHEV. And when I replace the workhorse SUV in the coming year, it’s likely to be a hybrid also.

Some thoughts as to why:

My wife’s daily driver is a 4S Hybrid.2  We installed two 220-volt chargers on the outside of the garage; it’s become second nature to just park & plug in. The all-electric range is ~22 miles and yet we find about 68% of our driving is electric. We’ve had the car for nearly a year and I’ve put gas in it six times.

The obvious reason for this is most of our driving is local. Even if we’re putting on more than 25 miles in a day, it does a pretty good job at ReGen. But a drive upstate that’s 100+ miles each way is obviously going to use gas.

We just passed 15k yesterday, and here are what the numbers look like:

Drive Time:                            539.37 hours

Zero Emissions drive time:    352.21 hours

Zero Emissions distance         7722.7 miles

Avg Consumption:                 0.1 kWh/mi

We purchased the car with 7,381.01 of the 15,006 on the odometer. Meaning, a touch over half (51.5%) of the mileage the car has done was as a pure EV. Interestingly, about two-thirds (65.3%) of the time in the car, it is in EV mode. This is with a 22-mile electric range.

There are 4 drive modes: E-Power (all electric), Hybrid, Sport and Sport Plus. What’s interesting is when you are in Hybrid (rather than E-Power) mode, the car uses electric to get up to about 25 MPH then kicks over to the twin-turbo V6. The least efficient part of acceleration is handled by the battery. For intermediate trips of about 50-100 miles, we can average about 75 MPG. You also become a more efficient driver as you learn how to feather the accelerator, slipping into electric mode while cruising at 55 mph.

We take the SUV back and forth to the weekend house by the beach, filled with dogs and luggage. Depending upon the traffic, we can average 60 or 70 MPG. On the 400-mile round trip to visit my sister in upstate NY, we averaged 38 mpg in this full-sized 5-passenger sedan – and that was with no charging at our destination.

I have road trips planned in the winter to St. Petersburg and in the spring to Chicago. A PHEV makes much more sense than an EV for us (not every hotel allows dogs).

Harry’s Garage has been driving a Range Rover, a BMW X5 50e, and a Taycan 4S (video after the jump). As a Hybrid, I would consider the RR Sport, the X5, or the Toyota Land Cruiser (not the FJ, but the Series 120).

Until the EV infrastructure is fully built out, prices come down and quality improves, the Plug-in Hybrid remains the best choice for my family’s lifestyle.

 

 

 

See also:
Test drive of a petrol car (2015)

Imagine we all drove electric cars. What would we make of a combustion engine? (2020 Video)

Automakers Have Big Hopes for EVs; Buyers Aren’t Cooperating (WSJ, Oct. 15, 2023)

Toyota Inks Deal to Mass Produce Solid State EV Batteries With 932-Mile Range (PC Mag, October 13, 2023)

 

 

Previously:
MiB: Darren Palmer, Chief of Battery EVs at Ford (March 19, 2022)

Ford to Tesla: “We got it from here” (June 17, 2022)

 

 

__________

1. At least until those batteries have to be replaced…

2. We were T-Boned as I was making a left at 5mph; we replaced that 2017 4S 2017 with 28k miles with a 2021 4S hybrid with ~7k miles.

 

 

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