China EV Insights | Vol.022

Special Report: From "Fringe" to "Mainstream": The Rise and Prospects of EREV Technology

In recent years, the EV market has undergone significant changes. As battery electric vehicles (BEVs) rapidly gain popularity, extended-range electric vehicle (EREV) technology has gradually moved from the "fringe" to the "mainstream." Particularly in China, the sales of EREV models have continued to rise, with companies like Li Auto, Aito and Leapmotor surpassing NIO and XPeng in sales. According to the latest data, from January to October 2024, the cumulative sales of extended-range vehicles reached 3.32 million units, representing a year-on-year growth of over 124%.

New Entrants' Strategy: EREV Technology at New Entrants' Strategy: EREV Technology at the "Tech Day"

XPeng Motors unveiled its Kunpeng Super Electric System at the 2024 XPeng AI Tech Day. This new EREV platform uses a hybrid silicon carbide coaxial electric drive system and full-platform 800V technology, achieving 430 kilometers of pure electric range. With the range-extender system, the total range can reach up to 1,400 kilometers, enabling users to charge only once or twice a week. Additionally, the Kunpeng Super Electric System features 5C ultra-fast charging technology, which can charge the battery from 10% to 80% in just 12 minutes, significantly improving charging efficiency.

NIO's Strategic Shift: Exploring EREV for International Markets

Unlike XPeng's move, NIO had long insisted on a battery swapping model, believing it to be the most efficient way to improve EV range and charging speed. However, recent developments show a shift in NIO's strategy. NIO plans to introduce its third brand, "Firefly," which will launch EREV models by 2027, targeting markets in the Middle East, North Africa, and Europe. These regions, where charging infrastructure is relatively underdeveloped, present a better fit for the EREV technology, as it addresses the local demand for longer range and rapid energy replenishment. This strategic shift is also influenced by NIO's major shareholder, CYVN Holdings, and highlights the growing importance of EREV technology in global markets.

The Market Advantages and Challenges of EREV

The main advantage of EREV technology lies in its flexible energy management system. Consumers can drive using only electric power when the battery is sufficiently charged, and when the battery runs low, the range-extending internal combustion engine kicks in to recharge the battery, extending the vehicle’s range. This capability is particularly valuable in regions where charging infrastructure is not yet widespread, as EREVs effectively eliminate "range anxiety" and provide a better user experience.

However, the future of this technology is not without debate. Proponents argue that EREV technology will play a key role in achieving the "dual carbon" goals, especially during the transition period, by reducing fossil fuel consumption. On the other hand, some believe that EREV technology is only a stopgap solution and may eventually be replaced by more advanced, environmentally friendly technologies, such as hydrogen fuel cells or next-generation battery technologies.

Future Outlook: The Potential of Flexible Energy Solutions

With continuous technological innovation and changes in market demand, the prospects for EREV vehicles remain promising. With dual support from policies and market dynamics, EREV technology is likely to become one of the mainstream solutions in the electric vehicle market. Despite challenges such as underdeveloped charging infrastructure and cost control issues, the flexibility of EREV’s energy management and its relatively low development risk give it a unique advantage in an increasingly competitive market.