The Internal Combustion Engine Is Making a Comeback (AI Translation)

【周刊提前读】内燃机又行了？ 新旧能源转换比预想更复杂

In recent years, the automobile industry has encountered a surprising trend where the internal combustion engine (ICE) is playing a pivotal role in the advancement of new energy vehicles (NEVs). By December 2024, the top three emerging car manufacturers shifted their focus toward range-extended hybrid products, causing other brands and manufacturers such as Avatr, XPeng Motors, Zeekr, and GAC Aion to follow suit. As a result, domestic sales of plug-in hybrid and range-extended hybrid vehicles surged by 85.2% year-on-year, a rate much higher than the growth in pure electric vehicle sales, according to the China Association of Automobile Manufacturers (CAAM) [para. 1][para. 3].

The plug-in hybrid electric vehicles (PHEVs) and range-extended electric vehicles (REVs) incorporate internal combustion engines, allowing them to serve as a transitional model between traditional fuel vehicles and fully electric ones. This shift has occurred despite the initial optimism that pure electric vehicles (EVs) would entirely replace gasoline-powered cars. However, challenges such as the energy density of power batteries and inadequate charging infrastructure have impeded the rapid growth of electric vehicles, particularly in the Chinese market, where hybrid products remain more popular [para. 4][para. 6][para. 8].

The global automotive markets, including Europe and the United States, are reevaluating their strategies in favor of ICE and hybrid vehicles due to the high costs associated with electric vehicle production. The European Union's strict emissions standards and plans to ban fuel-powered vehicles by 2035 are now being questioned, with calls for regulatory relaxation to foster a more supportive environment. The United States is experiencing similar challenges under the impending presidency of Trump, who may retract electric vehicle tax incentives [para. 9][para. 12].

In China, sales of NEVs are expected to cross the 50% threshold by 2025, ahead of previous targets, adding pressure on traditional car manufacturers and the internal combustion engine industry. There is a growing movement advocating for both traditional energy vehicles and the development of new technologies, such as zero-carbon fuels. Shuai Shijin, a professor at Tsinghua University, emphasizes that the future lies in new-energy internal combustion engines powered by zero-carbon fuels, aligning with China's carbon neutrality goals [para. 13][para. 15].

In November 2024, Europe saw hybrid electric vehicles (HEVs) outperforming electric vehicles and others, showcasing the role of internal combustion engines. HEVs, which require no external charging, present an attractive option for consumers. Toyota emerged as a leader in this segment, with Chairman Akio Toyoda predicting that electric vehicles, even with technological evolution, will only capture a 30% market share at best [para. 18][para. 20].

At the same time, Chinese companies like Aurora Bay, a subsidiary of Geely, are promoting hybrid vehicles as a compromise between electric and fuel vehicles. Liu Guoqing of Aurora Bay believes that with the withdrawal of subsidies for electric vehicles, engines will still hold a major market share of around 70%. In commercial vehicles, while new energy vehicles have gained traction in passenger cars, their presence is still low in the commercial sector. The automotive industry, therefore, sees a resurgence of internal combustion engines, especially in hybrid technology [para. 22][para. 24].

Despite the resurgence, stringent emissions standards like the EU's "Euro 7" and China's corresponding standards still pose challenges. Automakers face high costs in meeting these emissions criteria, making new energy vehicle development more economically feasible in the long term. The inclusion of carbon emissions in vehicle assessments highlights the ongoing tightening of regulatory pressure on traditional engines [para. 26][para. 29].

To achieve zero emissions, the internal combustion engine industry looks toward zero-carbon fuels, such as e-fuels, hydrogen, ammonia, and methanol. Akio Toyoda suggests focusing on reducing carbon rather than eliminating internal combustion engines, with e-fuels and hydrogen internal combustion engines showing promise. These developments underscore the necessity for infrastructure expansion and regulatory support [para. 33][para. 35].

In essence, while electric vehicles are positioned to eventually replace gasoline-powered vehicles, the internal combustion engine's role in the evolving automotive landscape remains significant. Industry experts advocate for a diversified development approach, recognizing that internal combustion engines may continue to adapt and play a pivotal role, especially in accommodating different energy technologies and market dynamics [para. 39][para. 42].