The move is aimed at reducing the cost of developing clean-energy vehicles. Many automakers are struggling to offer vehicles powered in a variety of ways, including plug-in hybrids, hybrids and electric cars.
Subaru decided to end its plug-in offerings due to weak sales. Plug-in hybrids had a share of just 2% of the global auto market last year, according to S&P Global.
Other automakers could follow Subaru’s lead and concentrate their resources on a smaller number of platforms to lower the cost of switching to cleaner-running vehicles.
Plug-in hybrids are a type of gasoline-electric hybrid vehicle that can be recharged at an electrical outlet while not in use. A typical plug-in hybrid can run for about 80km on battery power. When the battery runs low, a gasoline engine keeps the car running and recharges the battery.
Subaru currently offers a plug-in hybrid version of the Crosstrek SUV, but starting next year, the Crosstrek will no longer be available as a plug-in hybrid.
Subaru has been selling the plug-in version of the Crosstrek for US$36,845 since 2018, but sales have been sluggish, with only 2,600 units sold in the US last year, less than 1% of Subaru’s unit sales in the country, according to data from auto research specialist MarkLines.
Going forward, Subaru will focus on the development of EVs as the company plans to invest ¥250 billion (US$1.8 billion) in the development and production of EVs over the next five years.
In 2027, Subaru will build an EV factory in Gunma, north of Tokyo.
Subaru’s current EV offerings are developed with Toyota Motor, owner of a 20% stake. Subaru, however, is likely to develop EVs on its own going forward.
Developing an EV costs hundreds of millions of dollars and poses a challenge to small automakers.
Sweden’s Volvo already focuses its investment on EVs and has declared it will go all-electric in the future. Subaru executives also acknowledge that it will be difficult to develop EVs and upgrade PHVs at the same time.
For hybrids, Subaru will take advantage of its partnership with Toyota and use the Japanese auto giant’s technology. It plans to release new hybrid models around 2025.
For automakers, one of the main issues with PHVs is that they require a battery with a large capacity and output level. PHVs essentially have the features of both EV and HV and are expensive to develop.
Big automakers continue to offer PHVs.
Toyota, for instance, develops EVs, HVs and fuel-cell vehicles, in addition to PHVs. The company’s latest Prius hybrid has a plug-in version too, while Honda offers PHVs in China and the US.