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BMW and Mercedes shift CO2 strategy from EVs to plug-in hybrids

Mercedes-Benz and BMW are adding a wide range of new plug-in hybrids as they strive to reduce CO2 emissions to meet stricter EU targets this year. Both companies said putting plug-in hybrids versions on more models would help reduce carbon emissions this year by 20%.

LMC Automotive, an analyst firm, predicts that plug-in hybrids will outsell EVs in Europe this year.

LMC forecasts plug-in hybrids [PHEVs] to increase to 717,000 in Europe this year from 198,853 in 2019. That represents a 4% market share. According to LMC, EV registrations will achieve a 3.6% share, based on a rise to 652,000 from 365,372 in 2019.

You might view this trend as BMW and Mercedes (and others) backsliding from a big push in EVs to plug-in hybrids with combustion engines. If so, then blame “supercredits.”

Under EU rules, PHEVs that are capable of CO2 emissions below 50 grams per kilometer can be used to offset higher emissions from other vehicles. These supercredits are in place until 2023.

German engineering firm FEV told Automotive News last year that using a plug-in hybrid drivetrain with a battery big enough to get supercredits costs more than a small EV with a 32-kilowatt-hour battery. So Automakers are calculating that it will be easier to sell plug-in hybrids than EVs. And they see the added cost of a plug-in hybrid a better bet than facing fines.

PA Consulting said that Daimler and BMW could face fines of 997 million euros and 754 million, respectively, if they don’t reduce emissions from current levels.

According to Automotive News, Mercedes-Benz is adding plug-in hybrid versions to its line-up of C-Class compacts and E-class midsize sedans and wagons. In Europe, these plug-in hybrid drivetrains are already in use in smaller A- and B-class cars. By the end of this year, Mercedes could have more than 20 plug-in variants on sale.

Mercedes-Benz A 250e Sedan achieves CO2 emissions of about 32 g/km. DC charging from 10 to 80% takes 25 minutes.

Mercedes-Benz A 250e Sedan achieves CO2 emissions of about 32 g/km. DC charging from 10 to 80% takes 25 minutes.

The formula for the small cars is to combine a 1.3-liter gas engine, a 75-kW electric motor, and a 15.6-kWh battery pack. It’s coming next to Mercedes-Benz’s CLA coupe and wagon – and its GLA crossover.

There will be 7 new plug-in hybrid versions of Mercedes-Benz E-class models, including those that mate a battery pack with both gasoline and diesel engines.

Meanwhile, BMW will expand plug-in hybrid variants to the 3-series Touring wagon in both two-wheel-drive and all-wheel-drive. And there will be an all-wheel-drive version of the existing 330e plug-in hybrid sedan, as well as plug-in hybrid versions of the X1 and X2 compact SUVs.

BMW 330e xDrive Touring

BMW 330e xDrive Touring

In the US, the 2020 BMW 3-Series Plug-in Hybrid will increase its battery size from a 7.2-kilowatt-hour pack to 12 kWh. That’s expected to nearly double its all-electric range to around 25 miles.

Electrek’s Take

A month ago, Daimler CEO Ola Källenius admitted that it “will be a challenge” to meet Europe’s stricter emission targets in 2020 and 2021. It’s clear that Daimler, which sells Mercedes-Benz vehicles, is responding to that challenge by adding more plug-in and conventional hybrids (including mild hybrids).

Källenius said:

We are within striking distance of meeting the target. By the end of 2020, we want to double our sales of mild hybrids and quadruple the share of xEVs [plug-in vehicles].

Meanwhile, BMW is using flexible manufacturing so it can produce all-electric, plug-in hybrid, and internal-combustion cars on the same assembly line. That strategy differs from Daimler, Volkswagen, and General Motors, which are setting up EV-dedicated platforms and plants.

Regardless, what the shift to plug-in hybrids reveals is that BMW and Daimler see nothing urgent or magical about pure EVs. These companies will make business and market decisions to conform to compliance rules, but only to the degree required by law. Otherwise, they will wait until battery prices fall below a certain level or PHEV supercredits subside in 2023.

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Avatar for Bradley Berman Bradley Berman

Bradley writes about electric cars, autonomous vehicles, smart homes, and other tech that’s transforming society. He contributes to The New York Times, SAE International, Via magazine, Popular Mechanics, MIT Technology Review, and others.