#145: I say we want EREV-olution
October 14, 2024; an auto-geeky 11 minute read
We’re in the midst of a revolution, but because of a trade war, the world is largely unaware that (car) life as we know it will change dramatically in the next few years.
The pure (Battery Electric Vehicle) BEV is supposed to be the technology of the future, but I’ll make the case in this article that a new hybrid approach is more likely to be the dominant paradigm, because they are far greener than ICE (Internal Combustion Engine) vehicles, while their appeal to consumers would not require the significant tradeoffs of BEVs. The technology would not be possible without having developed the BEV first, but it is likely, in my view, to eventually dominate pure BEVs.
What’s an EREV?
In contrast to current ICE hybrids like the Prius, which have dual power systems (both ICE and electric), Extended Range Electric Vehicles (EREVs) only have electric drive systems, and the ICE functionality is only there to generate power for the EV battery. EREVs have similar gas tanks to ICE vehicles, as well as high speed electric charging ports. There are a variety of important advantages, from the consumer perspective:
EREVs have ranges equal or superior to ICE vehicles, and because they can use both electric and gasoline inputs, they have all refilling options available. ICE vehicles top out at around 700 miles of range, recent EREVs from BYD have up to 1250 miles of range (full battery + gas)
The gasoline drive efficiency of an EREV is high, perhaps 20-30% better than ICE vehicles, and as much as 2.9 liters per 100km, which is 80 mpg; even ICE hybrids top out around 50 mpg) because they are smaller engines optimized to run at only one speed (so even in stop-and-go city driving, the engines operate efficiently).
These long range high efficiency powertrains are appearing on cars (in China) with list prices under $15,000, as well as luxury family-sized SUVs for around $60,000.
By comparison, the “consumer-minded” BEV Tesla Model 3 long range rear-wheel drive has a range of 363 miles and starts at $43,000
Torque / acceleration / towing capacity is similar to most BEVs, because they are based on BEV platforms, but the severe range tradeoffs with BEVs towing large loads is mostly obviated by the EREV technology (by comparison, the F150 Lightning BEV under loads manages barely 100 miles of range, depending on the terrain); charging while carrying loads can also be a logistical nightmare
There’s also no comparing EREVs to Plug-in Hybrid EVs (PHEVs), which are ICE primary vehicles with transmissions, small batteries, and short EV ranges; EREVs have far greater power, fuel efficiency, and range – these offerings are almost sure to disappear once EREVs are widely available
Why EREVs rock
I’d argue that EREVs are superior to ICE, BEV, and all other forms of hybrid vehicles. The reasons are as follows:
Because EREVs use both existing gas infrastructure and EV charging networks, they offer maximum flexibility, but they don’t require large charging networks, so consumers can buy them even when charging networks are still sparse and unreliable. Thinking long term, this is especially important in areas like emerging markets, where charging networks will require enormous capital investment and will probably take decades to support BEVs without range issues
Gasoline has a far better (approximately 100X) energy density than EV batteries, so it is more efficient to have additional range in the form of gasoline and a (small) ICE power generator
EREV ICE engines are relatively small (1-1.5 liter engines) which are optimized to generate electrical power with about 50% thermal efficiency, compared to about 15% for normal ICE vehicles. They only have two modes: on or off, compared to traditional ICE vehicles which have to modulate power output across the torque spectrum because they are driving the vehicle directly through the transmission.
One criticism of EREVs is that the ICE engine and gasoline are ‘dead weight’ when they’re not being used. The counter to this is that most BEVs have larger and heavier batteries than they usually need (Tesla BEVs have battery weights ranging from 1200 to 1800 lbs). EREVs have batteries which are ½ to ⅓ the capacity of BEVs (so ½ to ⅓ the weight) so the combined weight of a modest battery, a small power-generating ICE (~250 lbs), and gasoline (~100 lbs) is still 20-40% lower than a BEV battery. Practically speaking, battery size can be optimized for the high use commute case. For people who are even more efficiency focused, it is possible to keep a minimal amount of gasoline in the engine, and then top it up when going on longer trips, whereas BEV battery capacity (and weight) cannot be changed.
Because EREVs are built on EV platforms, many of the auxiliary systems of ICE vehicles (transmissions in particular) are unnecessary, which reduces maintenance costs compared to ICE and ICE-primary hybrids
EREV engines are usually located in the front, where they allow more mass to be in the crumple zone (as opposed to the empty frunk in most EVs), which presumably makes them safer on the margin
Some critics might say EREVs are not as green as BEVs because they can use gasoline, but EREVs would still run primarily off of electricity (charged at home / office), so in normal use, people would fill their gas tank perhaps once a quarter depending on how much long range driving they did. Therefore, the amount of greenhouse gasses emitted per vehicle would be far closer to BEVs than ICE vehicles; but since their appeal to consumers would be superior to both ICE and BEV cars, higher sales volumes of EREVs would have a greater aggregate impact to climate change and carbon emissions, even if each vehicle was only slightly less green than a pure BEV
A slightly esoteric but important point is that EREV battery charging could be optimized: BEVs tend to get fully charged and largely depleted, which dramatically shortens battery life, while an EREV could vary between the optimal 20-80% charge range without associated range worries – which can increase battery life by as much as an order of magnitude, which is important for the most expensive vehicle component
Don’t take it from me: despite a deep consumer slowdown, sales of EREV vehicles in China were up 87% yoy; this is the fastest growing segment in arguably the most competitive auto market in the world
Example EREV: The $35,000 Li Auto L6
Maybe it’s best to watch this video, which details the mouth-watering specs of their most affordable EREV.
5 seater luxury SUV
Dual motor quad drive system which propels it 0-60 mph in 5.4 seconds
36.8 kWh battery (about ⅓ of an average BEV) with an electric-only range of 182 km / 113 miles, and range extended to 1200 km / 745 miles (more conservative range estimate)
The 1.5 liter 4 cylinder range extender engine charges the battery from 20% to 80% in 20 minutes
It sells for $35-38K depending on the specification
For a glimpse at a high end EREV, check out the Yangwang U8, a luxury SUV with a range of 620 miles, the ability to turn in place (a tank turn), and even ford rivers (floating mode), with a list price around $200,000.
EREV downsides
There aren’t many, but I feel compelled to try to poke holes in my thesis:
EREVs are not pure BEVs, so for people who feel that the BEV is the gold standard of greenness, it won’t make the grade. But since they’re 95% more green than ICE vehicles, and aren’t dependent on charging networks for widespread adoption, practically speaking, they are far more likely to make an impact on our collective carbon footprint, rather than waiting for BEV infrastructure to be fully built out, especially in non-developed markets
EREVs cost slightly more than economy hybrids, at least when Western manufacturers are making them, because the battery is larger than the tiny hybrid battery. That said, the Chinese EREVs are coming down to price points not even matched by conventional hybrids in the West
EREVs may not qualify for EV subsidies, because they aren’t entirely BEV automobiles. Used Chevy Volt EREVs do qualify for tax credits, however.
The addition of a ICE charger means EREVs are more complicated than BEVs, and can’t be made too small because of the need to have a contained engine space
Why are EREVs relatively unknown?
The primary reason that consumers are unaware of this technology is the leaders in this space are Chinese, particularly BYD (the overall car leader in China), and Li Auto (which makes nearly all EREVs). There have been a few EREVs available in the West: the Chevy Volt (discontinued 2019), the Mazda MX-30 (short range, poor fuel economy), and the BMW i3-REX (0.6l engine, short range) – they have been niche offerings with nowhere near the specifications of the Chinese state of the art – and they have not been particular inexpensive either.
Despite the likely dearth of Chinese cars available in the West in the near future, the EREV concept is about to leak into some well-known brands which won’t be blocked by tariffs, as well as some US native brands.
Genesis plans to introduce an EREV version of their mid-sized GV70 SUV (a model I happily owned in its ICE version, until earlier this year), with 560 miles of combined range; its parent Hyundai also plans to offer EREVs
Dodge will introduce the Ramcharger, an EREV with 690 miles of combined range, 663 horsepower, 0-60 times of under 5 seconds, and 14,000 lbs of towing capacity, but in the price range of $60-80,000
Toyota has been working with China’s BYD for a while, and has apparently agreed to use BYD’s DM-i (dual mode / EREV) technology in their cars for sale in China. Since Toyota currently dominates the ICE hybrid market with their Prius et al, a move to EREV would represent a notable phase shift (because their history and supply chain is centered around the primacy of ICE-drive engines and transmission drivetrains) to simpler EV-centric drivetrains, and moving ICE to a backup (battery charging range extension) role. It will be fascinating to see whether they have the strategic vision to make this change, before the industry makes it for them.
Nissan has their e-power drivetrain, but it’s strangely stunted: it doesn’t allow direct electrical charging (although I assume that’s not difficult to add, and that they will eventually add it). It’s available in the UK and Australia, but not in the US.
Hybrid sales have been accelerating in the US recently, as BEV sales have flattened – when EREV technology gives hybrids a material leap in specifications with very few compromises, I expect them to dominate the US market, and indeed any market where high speed charging networks are sub-scale. For developed city-states like Singapore and Hong Kong, where the concept of road trips is non-existent, range anxiety is a low priority, and EREVs lose their attractiveness.
In the West, I think the first move will be to introduce EREVs for luxury cars with relatively high price points, but eventually EREV technology will penetrate deeply into the primary hybrid market where price, fuel efficiency, and basic functionality are the determining factors. I expect ICE-drive PHEVs to disappear, because EREV specs are far superior for dual power functionality.
According to the IEA, 95% of the 14 million BEVs sold in 2023 were in the US, Europe, and China; this implies the paltry figure of 0.7 million BEVs for the entire rest of the world. Although this number has certainly increased since 2023, sales are likely to be concentrated in developed Asia (Japan, Australia, Korea, Taiwan, Hong Kong, Singapore). The issue with the rest of the (emerging) world is that there is naturally strong resistance to invest in a country-wide charging network – so for vast countries like India, Brazil, Argentina, et al, the path to EREV adoption is far more appealing than BEVs.
Toyota vs Tesla: who flinches first?
EREVs split the difference between Toyota, the King of economic ICE and ICE-hybrid vehicles, and Tesla, the Elon of BEVs. Since EREVs require an ICE charger, Toyota’s small displacement engine technology could theoretically be used to develop better and more efficient ICE chargers, whereas Tesla would have to develop it themselves, or buy it from a partner. My gut feeling is that Toyota is more likely to make the jump, especially because of their BYD partnership, whereas Tesla is both more wedded to the pure green narrative of the BEV, even if it’s only viable in countries which are wealthy enough, or small enough, that they can build out substantial charging networks in a short amount of time.
Final thoughts
From both the consumer and climate change perspectives, the EREV concept is the best practical alternative, with few compromises. But consumers in the West is still insensitive to this development because EREVs have never been available in their full blown glory, because of trade friction with China.
Eventually Chinese-spec EREVs will become common in the West, starting out situated at the high end, rather than in the high efficiency low-cost hybrid space, where the technology should thrive in comparison to the dominant ICE-primary hybrids, and where it has the most potential impact for climate change. Most consumers care about being green, but aren’t willing to make large sacrifices in order to do so – EREVs provide a viable solution by having great specifications, with no major compromises.
I can’t wait to see high spec EREVs become widely available.