Fuel tank has unexpectedly become the "savior" of the emerging pure electric vehicle industry.

The range-extended electric vehicle market is becoming increasingly crowded, with new competitors joining the fray in addition to established players like Li Xiang and Wenjie.

Despite the potential for further penetration of new energy vehicles, the automobile market has become saturated, consumer demand for new car purchases has declined, and users are not interested in new technologies and innovative scenarios. As a result, automakers find it difficult to stimulate demand through technological advancements alone. They are gradually shifting their focus from solely pursuing technological advancements to catering to market demands.

According to data from the China Association of Automobile Manufacturers, in August 2024, sales of pure electric vehicles reached 646,000 units, representing an 8.3% year-on-year increase. Meanwhile, sales of plug-in hybrid electric vehicles reached 453,000 units, a significant 81.6% increase year-on-year. These figures indicate that plug-in hybrids will remain a key driver of new energy vehicle sales in the coming years, prompting automakers to continuously refine their technological strategies, maintaining the iteration of pure electric products while leveraging range-extended vehicles to capture market share.

Emerging automakers are turning their attention to fuel tanks, with brands like ZEEKR, AVATR, Leapmotor, Nezha, and IM Motor – all previously focused on pure electric vehicles – quickly entering the range-extended electric vehicle segment. The addition of fuel tanks has significantly boosted sales for these brands compared to their pure electric offerings.

Recently, media reports suggested that XPeng, which had long hesitated over range-extended powertrain solutions, has made progress. In the first half of this year, the company completed sourcing for key components, and its first range-extended model is under accelerated development, with mass production expected in the second half of 2025, no later than the fourth quarter. During XPeng's annual "1024 Tech Day" this year, the company may reveal more information about its range-extended models.

Another player holding firm to the pure electric vehicle segment has fallen away.

Emerging automakers cannot escape the "boomerang" effect; hybrids are indeed in demand

During a public speech, He Xiaopeng, XPeng's CEO, once expressed his view that while XPeng had considered developing plug-in hybrid electric vehicles, it ultimately decided against it. He believed that hybrids were only a short-term solution for new energy vehicles, and that pure electric vehicles represented the future in the long run.

A slide from a presentation at the time read: "Ultra-fast charging + long range + self-operated charging stations will change the market landscape and phase out hybrids." However, times have changed, and this statement has come full circle like a boomerang.

Li Xiang, CEO of Li Auto, once stated that range-extended electric vehicles would remain the optimal solution for SUVs over the next five years. This view was initially met with criticism from industry executives and netizens, who publicly ridiculed the supposed backwardness of the range-extended technology path. Nevertheless, consumers have shown a greater willingness to embrace hybrids, which offer a sense of security compared to pure electric vehicles.

According to industry insiders, XPeng's internal team began researching range-extended vehicle solutions two years ago, but the plan was never finalized due to indecisiveness at the senior management level. It was only during XPeng's first-quarter earnings call in 2024 that He Xiaopeng officially acknowledged the demand for hybrids among customers.

Sources revealed that XPeng completed sourcing for Dong'an Engine in the first half of the year. The company's first range-extended model will be a large SUV, internally codenamed G01, targeting the hybrid market above the 200,000 yuan price point. It will be developed based on the XPeng G9 prototype. Dong'an Engine is the same supplier that provides range extenders for Li Auto vehicles.

The G9 has indeed been a workhorse for XPeng, serving as the technological platform and product basis for XPeng's collaboration with Volkswagen as well as its range-extended SUV. During the celebration of the launch of the XPeng MONA M03, He Xiaopeng announced that XPeng would introduce new models in each of the next five quarters, including range-extended vehicles.

The transition from pure electric to range-extended vehicles is relatively straightforward for automakers. It primarily involves ensuring adequate internal space, optimizing the energy replenishment efficiency of the range extender, controlling vibration and noise, and appropriately reducing the size of the battery pack while increasing the fuel tank capacity. The construction of range-extended hybrids is relatively simple, and their upfront costs are lower, making them more appealing to both automakers and consumers.

However, new vehicle development typically takes 18 to 24 months. XPeng is accelerating the development and production line layout of its new models to meet the anticipated mass production timeline next year.

Many electric vehicle makers initially expressed skepticism towards hybrids, viewing them as a transitional solution to address range anxiety. Nevertheless, the market has embraced these "transitional technologies" with unprecedented enthusiasm. Automakers cannot rely solely on technological prowess to succeed; they must ultimately listen to the voice of the market.

Entering the range-extended market, XPeng aims to be more than a follower

According to insiders, He Xiaopeng has instructed XPeng's internal team to avoid transitional range-extended technology solutions and instead aim for industry-leading standards.

The success of range-extended plug-in hybrids (REEV), despite criticism of their "technologically backward" nature, is well-founded. Unlike PHEV (plug-in hybrid electric vehicles), REEVs employ an internal combustion engine that is solely dedicated to power generation, without any mechanical connection to the wheels. This simplifies the mechanical structure, reduces the failure rate, and fully preserves the driving experience of an electric vehicle.

However, REEVs rely solely on electric drive, with the internal combustion engine unable to directly power the wheels. This can lead to issues such as limited power and excessive fuel consumption at high speeds when battery charge is low. Early REEVs were often criticized for being "great when charged, useless when not."

Additionally, XPeng has not disclosed further details about its collaboration with Dong'an Engine. Li Auto's REEVs are known for their superior thermal efficiency and quiet operation, but they require premium 95 octane fuel, which may deter some consumers. XPeng would do well to consider fuel economy in its designs.

Ultimately, REEVs represent a specialized category within plug-in hybrid technologies, with automakers adopting varying technological approaches to address the inherent limitations and operational coverage challenges of traditional REEVs.

For instance, Lynk & Co's EM-P Super Range Extension Technology employs a combination of a fuel engine and three electric motors (P1+P3+P4). While its robust performance is impressive, the EM-P system also features a 3-speed DHT Evo transmission, allowing the engine to engage at high speeds for optimal energy balance. In a sense, the Lynk & Co EM-P incorporates aspects of PHEV technology to mitigate high-speed energy consumption issues.

ZEEKR's upcoming hybrid model, scheduled for mass production next year, is rumored to employ a similar EM-P Super Range Extension powertrain technology.

The recently launched AVATR 07 also features Changan's latest Kunlun Range Extension System, which converts 1 liter of fuel into 3.63 kWh of electricity, demonstrating exceptional thermal efficiency. Addressing concerns about performance under low battery conditions, AVATR 07's range-extended AWD model achieves a 0-100 km/h acceleration time of 4.9 seconds when fully charged and 5.8 seconds when the battery is low, showcasing its consistent performance even in low battery scenarios.

Crucially, the Kunlun Range Extension System is equipped with a CATL Shenxing Super Hybrid Battery that supports fast charging technology. It can charge from 30% to 80% in just 15 minutes, marking the first time that "800V"-level fast charging has been applied to hybrid vehicles.

The rapidly evolving new energy vehicle technology has seen significant improvements in even seemingly simple range-extended systems. In other words, while transitioning from pure electric to range-extended vehicles may be less challenging than the reverse, automakers have addressed many of the pain points associated with range-extended powertrains over the past few years.

Without the backing of a traditional automaker, XPeng lacks a strong foundation in internal combustion engine technology. Developing an industry-leading range-extended solution without any pain points will undoubtedly be challenging. However, He Xiaopeng's vision is clear: Emerging players should not merely follow the trend in developing range-extended products. To achieve industry leadership, they must address the inherent pain points of range-extended technology while leveraging XPeng's unique technological advantages to create a competitive edge. This, perhaps, is what He Xiaopeng envisions.

Pure electric vehicles are hard to sell; fuel tanks are the "range extender" for sales

Among mainstream new energy vehicle makers, Tesla stands alone, with NIO being the only other brand that continues to focus solely on pure electric vehicles. This is not to say that these companies are unaware of market trends; both Tesla and NIO maintain extensive charging networks, with NIO offering the industry's only battery swap service, which are key factors in maintaining their high monthly delivery volumes.

However, given the current scarcity of resources, it is challenging for automakers to survive, let alone invest heavily in building charging networks that alleviate range anxiety. To sell well, range-extended or hybrid vehicles have become a necessity for emerging automakers. XPeng's accelerated push into range-extended vehicles represents a strategic shift, a response to market demands.

New energy vehicle users are inevitably transitioning from traditional gasoline-powered vehicles, with ingrained usage habits. No matter how advanced pure electric vehicles become, some users may still struggle to accept a life solely reliant on charging. Hybrids, on the other hand, offer a comprehensive upgrade over gasoline-powered vehicles in terms of driving experience, along with more flexible charging options that can serve as a fuel-saving alternative.

XPeng needs range-extended vehicles more than any other automaker. Global enthusiasm for pure electric vehicles is waning, putting additional pressure on automakers with already modest sales figures, not to mention XPeng's plans for international expansion. Sticking to pure electric vehicles alone would likely delay its goals.

Brands that entered the range-extended market early have achieved enviable success, with the addition of range extenders and fuel tanks helping them secure a larger market share. Li Auto and Wenjie consistently sell around 30,000 vehicles per month. Subsequently, Zero Run and Deep Blue, which have also ventured into range-extended vehicles, have seen significant sales growth. XPeng's decision to increase its investment in range-extended vehicles undoubtedly presents an opportunity to boost sales, expand its sales scale, and popularize AI intelligence.

Li Xiang's "prophetic" statement may still hold true: Fuel tanks are the "range extender" for sales. It remains to be seen whether XPeng can seize the opportunity presented by the hybrid vehicle boom and achieve market share growth.

IFA100: Leitech Reporting Team Returns Triumphantly!

From September 6 to 10, IFA 2024 (Internationale Funkausstellung Berlin), celebrating its 100th anniversary, kicked off in Berlin, Germany.

On the occasion of IFA's 100th anniversary, AI large model technology is profoundly reshaping the tech industry. Leitech dispatched a reporting team to provide frontline, comprehensive, and professional coverage of IFA 2024, generating over 40 pieces of content. Drawing on our extensive experience in covering tech exhibitions such as CES, MWC, and AWE, we ensured the timeliness, richness, and professionalism of our IFA coverage. This content was disseminated across Leitech's 3 million WeChat followers and 10 million new media matrix, reaching an estimated 5 million readers/viewers across all platforms.

We look forward to reconnecting with you at the next IFA, CES, MWC, AWE, and other global tech exhibitions!

Source: Leitech