(p. B12) Don’t write off hybrid electric vehicles.
After Tesla, the most highly valued U.S.-listed EV company isn’t homegrown Rivian or Lucid but Li Auto, a Chinese manufacturer that went public in 2020 by listing American depositary receipts.
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What is surprising is that Li has overtaken NIO to lead the new generation of Chinese startups. Li doesn’t make the purely electric vehicles that were popularized by Tesla and that have become the technological focus of other startups and most old-school car manufacturers. Instead, it specializes in extended-range EVs, which use a generator to power up the battery with gasoline if it runs out of juice.
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The popularity of what is essentially a plug-in hybrid, albeit a cutting-edge one, is notable in the Chinese market, which has in many ways led the transition to EVs.
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But Chinese charging infrastructure is patchy, leading to range anxiety. Brokerage Bernstein expects 65% growth in plug-in hybrid sales in China this year, versus 25% growth for pure EVs.
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(Note: the online version of the commentary was updated February 27, 2023, and has the same title as the print version.)