«Hybrids — the road to hell». The father of electric cars explains why China is winning the electric car race

Andy Palmer, former CEO of Aston Martin and Nissan, known as the “godfather of electric cars” thanks to his work on the Nissan Leaf (the world’s first mass-market electric vehicle with over half a million units sold), shared his views on the situation with electric cars and hybrids. He believes that hybrid cars are a mistake.

China’s Dominance

Palmer warns automakers against delaying the shift to electric vehicles in favor of hybrids. He considers such a strategy a “futile exercise” that only allows Chinese electric vehicle manufacturers to further outpace their competitors.

“Hybrids are a road to nowhere. It’s a transitional strategy, and the longer you linger there, the more you fall behind competitors. It allows China to strengthen its market position,” he explained.

Over recent years, Chinese brands like BYD have conquered their market with affordable and high-tech electric vehicles and hybrids and are rapidly entering international markets. Palmer finds Chinese cars “simply marvelous” as they “offer exceptional value for money.”

The key to China’s success is its long-term industrial strategy. According to one study, the Chinese government has spent at least $230 billion on subsidies for electric vehicle manufacturers since 2009.

Palmer, who previously served on the board of directors of Dongfeng Motor Company (a joint venture between Nissan and the Chinese state manufacturer Dongfeng), has seen firsthand how aggressive China’s strategy in this sector is.

“The Chinese government has set a clear task—to transition to new energy vehicles,” he said.

Challenges for Other Markets

The US and Europe are responding to the rise of Chinese automakers by introducing tariffs to protect their industries. However, Palmer believes such measures only weaken the ability of Western companies to compete, as “tariffs make the local industry lazy, and the gap only widens.”

Palmer calls for preparation for a “survival battle” with Chinese competitors, especially in Europe, which he considers the toughest market in the world. He believes that if Chinese companies can maintain their presence in the European market, they will become invincible.

The rapid growth of Chinese electric vehicle giants has put pressure on Japanese automakers like Nissan, Toyota, and Honda.

Nissan announced a reduction of 9,000 jobs in November, while Toyota and Honda are experiencing declining sales in China and dropping profits. In December, it was revealed that Nissan and Honda are in merger talks.

According to Palmer, Toyota’s decision to initially bet on hybrids brought success but has now placed Japanese manufacturers in a difficult situation.

“Toyota has led the Japanese industry into a dead end, and now it will be difficult for them to get out of it,” he said.

Nissan, he says, “shot itself in the foot” by failing to capitalize on its 10-year lead in electric vehicle technology.

The past year has been tough for the electric vehicle market. Despite growing sales, adoption rates have been slower than expected, forcing automakers to cut back on investments.

Palmer believes the main reason why some consumers are hesitant to switch to electric vehicles is the high price. The average price of an electric vehicle in the US in October was $56,902, compared to $48,623 for gasoline cars. To invigorate sales, prices need to match those of internal combustion engine vehicles. And for that, offering cars with smaller batteries is necessary. To reduce “range anxiety,” the development of a charging station network is essential. This will make electric vehicles with smaller batteries more attractive to consumers.

Palmer also thinks the West should adopt China’s approach to industrial strategy, especially in battery manufacturing, where China is a leader.

Source: BI