Focus shifts to range-extenders as bridge to EVs

REx cars still aren't as popular as PHEVs, of which 1.37 million examples were sold in China in the same period, but their sales are growing at twice the speed.

Leading the REx charge in China is one of the most successful ‘new-energy' brands to emerge, Li Auto, which has built its empire on elegantly anonymous SUVs that package a 1.5-litre petrol engine with an oversized battery.

Its newest and smallest, the L6, uses a 36.8kWh LFP battery from CATL for an electric-only range of 132 miles, while the flagship L9 has a 52.3 kWh pack for an official range of 149 miles.

Li recorded 106,189 wholesales (sales to dealers) in the first four months of 2024, according to data aggregator Bestsellingcarsblog.com, putting it ahead of Hyundai, Ford, Volvo, Kia and Chevrolet in China.

In April, the company sold more plug-in vehicles in the country than BMW.

Li had been on a glidepath to shift to pure EVs, starting with the newly launched eye-popping Mega MPV. However, in its first-quarter earnings call last week, founder Xiang Li confirmed that the company will postpone its EV rollout from later this year to 2025.

Ostensibly the reason given was the lack of chargers and showroom space for new models, but leaving the comfort of its successful REx niche to push into China’s cut-throat EV market can’t be appealing right now, especially when Li posted its first loss for the quarter after a profitable run.

Others in China are eyeing up REx sales as well. Premium brand Avatr, a partnership between Changan, CATL and tech giant Huawei, has just launched the 07 crossover with the option of a 39kWh battery and a 1.5-litre petrol engine.

Further down the price rankings, Neta has launched the L EREV SUV with either a 30kWh or 40kWh battery, the latter giving a claimed 193 miles before the 1.5-litre petrol engine is needed.

In China, REx cars and PHEVs are popular because they attract many of the incentives as EVs for both car makers and buyers.

In the UK, PHEVs are mainly sold to company car drivers tempted by the lower BIK tax bills resulting from low official CO2 ratings. 

However, that loophole is going to change in 2025, when the generous WLTP emissions measuring test is changed to reflect the much lower real-world battery running time of PHEVs.

That would double the official CO2 figure for the BMW X1 PHEV from 40g/km to 85g/km, the International Council of Clean Transportation (ICCT) calculated.

Car makers are increasing battery sizes in PHEVs to offset that change, but it could also be the perfect catalyst for a REx rollout in Europe.

So far, however, no major car maker in Europe has said it's working on a solution. In fact, Mercedes-Benz has ended a development programme to investigate REx tech, in which an EQS electric limousine was fitted with a turbocharged 1.0-litre two-cylinder engine, a source told Autocar.

Mercedes chief engineer Christoph Starzynski didn’t confirm that news in a recent chat with Autocar, but he did voice the German company’s preference for its current strategy. “For us, the better choice is to stay with performance hybrids,” he said.

Mercedes isn't convinced that its customers would accept what it sees as a compromise in driveability by introducing REx cars.

“My strong belief is that if you want to have a combustion engine in an E-Class or S-Class, you don’t want a four-cylinder engine which turns on when the batteries are empty,” he said.

Drivers willing to go electric are well served by the long-range options in EVs like the EQS, Mercedes believes.

BMW is also not about to return to REx, CEO Olive Zipse told investors and analysts on the company’s first-quarter earnings call. “To have a very large battery plus a combustion engine in there... There is a limit to the financial logic,” he said.

“Our PHEVs are currently around the 100km [range], which I think is the perfect point where the customer says ‘this is what I would like to pay for’.”