One widespread news headline earlier this week (including here on ValueWalk) was that BYD, a Chinese electric vehicle maker backed by Warren Buffett, had taken the title of the world’s largest maker of electric vehicles from Tesla. However, there’s an important distinction to point out that might change some people’s views on the matter.
Clarifying The Headlines About Tesla And BYD
Tesla delivered a little more than 250,000 vehicles during the second quarter, marking its first quarter-over-quarter decline in two years following the lockdown-related shutdown of its factory in Shanghai. That total brought the California-based EV maker to 564,742 electric vehicles in the first six months of the year.
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Meanwhile, BYD reported 638,157 electric vehicle deliveries for the first half of the year, but that included plug-in hybrids. In our piece on the Tesla/ BYD story, we did mention that BYD’s number included plug-in hybrid vehicles, which pair a traditional internal combustion engine with a battery typical of electric vehicles.
However, Electrek added that nearly half of the vehicles BYD is classifying as “electric” are plug-in hybrids. The tech blog argued that this fact means Tesla remains the world’s largest electric vehicle maker.
Is The Difference Justified? Or Just Splitting Hairs?
There’s no doubt that plug-in hybrids are a transitional technology that will be made obsolete when enough all-electric vehicles provide ranges that are long enough to allow for fast charging, road trips, and travel times similar to those offered by gasoline-powered vehicles. As a result, it is important to make the distinction between all-electric vehicles and plug-in hybrids.
However, many government bodies, including the U.S. Environmental Protection Agency, do lump “plug-in hybrid electric vehicles” (PHEVs) with all-electric vehicles. As a result, some may question whether it’s important to distinguish between all-electric and plug-in electric vehicles at this stage.
One thing that’s critical to understand when it comes to PHEVs is that many of them can only travel around 20 to 40 miles on their batteries alone before they start using gasoline. While this is fine for those who don’t stray from home much, it is a key issue for those who take road trips.
Of course, all-electric ranges on PHEVs are increasing, but they still come up far short of those offered by all-electric vehicles. In fact, Tesla cars are known for their exceptional range, typically in excess of 300 miles on a full charge. As a result, it’s easy to see why EV enthusiasts would be up in arms about plug-in hybrids being lumped in with all-electric vehicles.
As for whether they really should be classified as one group, it all depends on your point of view.
Published First on ValueWalk. Read Here.
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