Plug-in hybrid vehicles and the 2035 objective: analysis of the socio-economic and climate impacts of a prolonged authorization of sales in the name of ‘technological neutrality‘

Allowing the sale of plug-in hybrids or range-extended electric vehicles beyond 2035? The IMT shows that such a choice would (1) cost users more, particularly the most modest ones driving older used vehicles, (2) lead to significantly higher greenhouse gas emissions, and (3) negatively impact the trade balance and national sovereignty.

As the European Union debates the revision of its CO2 standards for new cars, the Institute for Mobility in Transition (IMT-IDDRI) publishes a new study, “Plug-in hybrid vehicles and the 2035 objective: analysis of the socio-economic and climate impacts of a prolonged authorization of sales in the name of ‘technological neutrality’.”

The study examines how authorizing the sale of plug-in hybrid vehicles after 2035, instead of maintaining the planned phase-out of internal combustion engines by that date, would affect households, the climate, and the industry. The debate initiated by car manufacturers on the relevance of banning the sale of internal combustion-engine vehicles from 2035 onwards has brought forward the concept of “technological neutrality”.

More precisely, it has fueled the idea that other pathways could exist —more efficient, more economical, or politically more acceptable—to progress toward decarbonization and achieve the European Union’s climate objectives, notably carbon neutrality by 2050.

In particular, the notion that new powertrain technologies could make the transition more acceptable for car users has recently gained traction in the public debate. Two technologies are mainly highlighted: plug-in hybrid electric vehicles (PHEV) equipped with higher-capacity batteries than current models, and range-extended electric vehicles (EREV)—electric vehicles fitted with a small combustion engine used solely as a generator to recharge the battery.

Some manufacturers present these powertrains as ones that offer greater flexibility for long-distance travel, by limiting the reliance on costly motorway charging, and as showing a carbon footprint comparable to that of fully electric vehicles, thanks to a smaller battery and better energy efficiency (due to a potentially lower total vehicle weight). However, their actual ability to deliver on these promises remains highly uncertain: such vehicles do not yet exist on the European market, and their performance has not been robustly quantified.

To bring objectivity to these issues, the analysis produced by IMT-IDDRI, in collaboration with C-Ways and ICCT, relies on more than 1,000 simulations combining real use cases, vehicle segments, powertrain types, and buyer categories. In addition to the assumptions generally used by car manufacturers—focusing on new car buyers (mainly corporate fleets, accounting for about 50% of sales, and for the biggest part of the rest, households belonging to the top 20% income bracket)— the study also includes the costs borne by 2nd-hand buyers and 3rd-hand buyers.

This approach better reflects the economic reality of most households, whose driving profiles (daily versus long-distance use), investment capacity, and maintenance needs differ significantly from those of new car buyers.