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While EREVs can go further than PHEVs, they can’t go as far as BEVs with current technology

As discussed in previous sections, the average electric range of Chinese EREVs is above 180 km, surpassing the 80 km range of PHEVs but falling short of the average 500 km range of BEVs in Europe. However, the best-in-class Volkswagen ID.ERA concept car is expected to reach 300 km, and future EREV models fitted with new battery technology could extend this further. CATL announced its new Freevoy battery could unlock electric range over 400 km. For example, the Stellar drive from IM Motor is expected to use a 66 kWh Freevoy battery to achieve an electric range of 450 km. These future long-range models with an electric range of over 300 km have the potential to offer a range comparable with that of today’s entry-level BEVs.

While EREVs can be cleaner than PHEVs, today’s model falls short of the high environmental standards required in Europe

EREVs benefit from powerful electric motors and a series configuration that enables emissions to be minimised in electric mode. This is an advantage over PHEVs, which have less powerful electric motors and therefore drive in combined electric-combustion mode for a significant proportion of their use.

EREVs could reduce NOx emissions compared to PHEVs. If engineered well, the EREV combustion engine would operate almost like a stationary generator with a steady load, reducing NOx emission spikes that occur during dynamic engine operation.

Due to their long ICE range capability, the average utility factor of EREVs could be between 15% and 70%. They may therefore exhibit similar charging behaviour to PHEVs, which travel more than half of their distance in Europe in depleted battery mode. Nevertheless, well-designed, long-range (300+ km) EREVs with a limited fuel tank size (e.g. 15 L) could be driven predominantly in electric mode, achieving a utility factor close to 70%.

Taking the whole lifecycle of the vehicles into account, including the production phase, BCG calculated that EREVs with a 15% utility factor emit, on average, 127% more CO₂ than similar BEVs. Even with a utility factor of 65%, EREVs would emit 48% more CO₂ than BEVs over their lifetime, making them suboptimal in terms of environmental performance.

EREVs benefit from fast-charging capability, yet they rely on fossil fuel infrastructure

With the ability to use DC fast charging at a rate above 50 kW, all EREV models have a significant advantage over PHEVs. Moreover, the ability of these vehicles to drive in combustion mode can be useful for a certain category of users during the transition, particularly those living in areas with limited charging access. However, as the transition progresses towards the end of the 2020s, European regulations such as the Alternative Fuel Infrastructure Regulation (AFIR) and the Energy Performance of Buildings Directive (EPBD) are expected to provide most drivers with sufficient access to public and private charging. While an ICE range is beneficial in the short term, it will not be a significant advantage for EREVs in the 2030s as fuel stations become scarcer. Furthermore, the implementation of carbon taxes as part of the Emissions Trading System for road transport (ETS2) is expected to increase fuel prices and therefore driver costs. Reliance on fossil fuel infrastructure could also become a disadvantage as Europe increasingly prioritises energy sovereignty.

The future price of the EREV powertrain is uncertain but operating costs will be a burden

Compared to PHEVs, these models have larger batteries and could initially be sold at a higher price. However, as battery prices are expected to decrease, accounting for a smaller proportion of the total car price, other factors could influence vehicle pricing. For example, well-designed EREVs with small combustion engines for emergency backup could be built on the same platform as BEVs with a lower complexity than PHEVs, benefiting from the economies of scale of the BEV platforms. In the European market, PHEVs will face an increasing cost burden as the production volume on ICE platforms decreases. Therefore, EREV could become cheaper than PHEVs in the medium term.

Despite smaller batteries than BEVs, EREVs would be more complex and costly due to the additional ICE components that would likely not benefit from significant economies of scale. Therefore, EREV prices in Europe are unlikely to fall below BEV prices. BloombergNEF long-term modelling confirms this for the Chinese market as they show that, in the absence of subsidy, EREVs would never reach price parity with battery electric vehicles, but they could displace PHEV sales due to their lower price.

Overall, a well-designed EREV with a small combustion engine could be cheaper than a PHEV, but it is unlikely to be as affordable as a mass-market BEV. However, EREVs could provide cheaper options than BEVs in premium SUV segments where extra-large BEV batteries may be common.

In terms of total cost of ownership (TCO), reports from BCG highlight that EREVs incur higher costs than BEVs. BCG calculated that a D-segment EREV would cost €1,000–€1,200 more per year than a similar BEV over a five-year ownership period.

Based on sales price and TCO, EREVs appear to be better suited to premium segments, where users are less sensitive to operating costs and long electric ranges could limit the price benefits of BEVs.

EREVs are not suited to mass-market segments, but they could serve as a transition technology for certain users before 2035 when replacing combustion vehicles

Firstly, they can serve users driving long distances and living in remote areas, where charging infrastructure is expected to remain limited during the transition, and who lack access to private charging at home or at work. While this use case is quite common in China, explaining the popularity of EREV in the country, these conditions are far less common in Europe and should disappear by 2035 thanks to charging infrastructure coverage. In this use case, well-designed EREVs can provide an emergency backup drive in combustion mode. However, the fuel tank should not be oversized to prevent the vehicle from being used primarily in combustion mode.

Secondly, EREVs would be designed to target premium drivers seeking large vehicles with long-range capabilities and intermediate features between PHEVs and BEVs. A survey conducted by McKinsey has confirmed that the interest in EREVs was higher among owners of premium-brand vehicles. However, these use cases are expected to be relatively limited, given the increasing competition from long-range PHEV models (e.g. Lynk & Co has introduced a model with an electric range of 200 km) and new battery technology that enables ultra-long-range BEVs (e.g. Mercedes-Benz is testing a BEV prototype with a range of 1,000 km using a solid-state battery).

Chinese carmakers are leading the way with EREV technology, whereas European carmakers have limited plans in Europe

EREV technology does not appear to be a strategic priority for European carmakers. Many carmakers are already benefiting from, or planning to further develop, their PHEV technology, which benefits from the legacy ICE supply chain in Europe. In this context, carmakers have not focused extensively on EREV, a technology that is dominated by Chinese companies and would not significantly benefit the ICE supply chain in Europe.

This technology is being developed for the premium segment, with BMW considering selling an EREV version of the iX5 in Europe and luxury carmakers such as Lotus developing high-end EREV models. However, carmakers must prioritise investment in BEVs to develop the best BEV platforms for the market, and avoid making competing investments in PHEV or EREV technologies. For example, the CEO of Volkswagen declared that it makes no sense to have both range extenders and plug-in hybrids in smaller European cars, whereas this technology is relevant for large vehicles sold in the US.

Finally, in the undesirable case where the EU allows for an exemption for the sale of vehicles running on carbon-neutral e-fuels under specific conditions after 2035, EREVs may be the preferred e-fuel compatible vehicle given that the high prices of e-fuels would limit such fuels to niche applications.

The EU car industry wants plug-in hybrid vehicles to be considered carbon neutral, but data from thousands of vehicles shows that PHEVs emit just 19% less CO₂ per km, on average, than petrol and diesel cars. Carmakers are pressuring EU lawmakers to treat hybrids as clean vehicles under a ‘technology neutral’ approach to decarbonising cars. But T&E analysis of emissions data from 127,000 PHEVs finds they emit far more than claimed and the extra fuel consumed costs the average driver €500 a year.

PHEVs are supposed to save on emissions and fuel by switching between a battery, which is recharged by being plugged in, and a petrol or diesel engine. But in the real world, CO₂ emissions from plug-in hybrids are almost five times what official tests suggest. The real-world data differs hugely from the official ‘WLTP’ tests where vehicles are driven in a way that regulators consider to be normal.

In the real world, plug-in hybrids emit 135g of CO₂ per km on average, according to T&E analysis of data gathered by the European Environment Agency (EEA) from fuel monitors on 127,000 vehicles registered in 2023. Petrol and diesel cars emit 166g of CO₂/km on average.

Engines still running in electric mode

Even when driven in electric mode, PHEV engines consume 3 litres of petrol per 100km, on average, the EEA data shows. As a result, they emit 68g of CO₂/km in electric mode – 8.5 times as much as official tests claim. This is because the electric motors in PHEVs generally have insufficient power for higher speeds or steep inclines and the engine needs to kick in. On average, the engine supplies power during almost one-third of the distance driven in electric mode, according to the data.

€500 extra a year

PHEVs cost drivers €500 more a year than claimed to fuel and charge because of the hidden fuel consumption in both electric and engine modes, the report also finds. Not only are plug-in hybrids expensive to drive, they are also more expensive to buy than clean alternatives. The average selling price of PHEVs in Germany, France and the UK in 2025 is €55,700, according to Bloomberg Intelligence. This is €15,200 higher than the average price of a battery electric car.

Lucien Mathieu, cars director at T&E, said: “Plug-in hybrids are one of the biggest cons in automotive history. They emit almost as much as petrol cars. Even in electric mode they pollute eight times as much as official tests claim. Technology neutrality cannot mean ignoring the reality that, even after a decade, PHEVs have never delivered.”

Long range PHEVs = more emissions

PHEV emissions are also increasing because of the trend towards longer electric ranges as bigger batteries make the vehicles heavier and, therefore, burn more fuel in engine mode. These heavier vehicles also consume more energy than smaller cars when driven on the battery. Plug-in hybrids with an electric range above 75 km actually emit more CO₂ on average than those with a range between 45 and 75 km, the data shows.

Mercedes-Benz has the biggest gap between its official and real-world PHEV emissions, according to the 2023 data, emitting 494% more, on average. Its GLE-Class has the highest real-world emissions gap of cars sold that year, exceeding its official value by 611%. The other major European carmakers emitted around 300% more than their official CO₂ ratings.

The European car industry wants to be allowed to sell PHEVs after the EU’s 2035 deadline for zero-emission cars. Carmakers are also demanding that the EU cancel the ‘utility factors’ it has set to correct the CO₂ rating of plug-in hybrids. The utility factors set for 2025 and 2027 gradually correct the gap between official and real-world emissions, meaning carmakers’ EU CO₂ targets get stricter, pushing manufacturers to sell more battery electric cars.

Lucien Mathieu said: “Weakening the rules for plug-in hybrids is like drilling a hole in the hull of Europe’s car CO₂ law. Instead of steering the market toward affordable zero-emission cars, carmakers will flood it with expensive, polluting PHEVs. That risks sinking the EV investment certainty the market desperately needs.”

By Emily Bary

A Deutsche Bank analyst is upbeat about Vertiv’s stock and says the rush of new data-center deals suggests ‘the bull case may not even be bullish enough’

Vertiv makes cooling technologies that are vital to AI data centers.

Data-center technology provider Vertiv Holdings Co. has been a big winner as artificial intelligence has proliferated. But Deutsche Bank says investors who missed out on the stock’s 1,600%-plus rally over the past three years can still get in on future gains – though not quite at the same magnitude.

Admittedly, Vertiv’s stock (VRT) is expensive relative to recent historical levels, at least when you look simply at how it trades relative to forward earnings. Deutsche Bank’s Nicole DeBlase noted it trades at a ratio of 39x, versus its 32x one-year median.

But she thinks it’s better to look at the stock’s ratio of price to earnings to growth, where it screens in the bottom quartile among peer stocks in the multi-industry and electrical-equipment sector, meaning it’s relatively cheap from that perspective.

Read: AI has already disrupted hiring for these jobs, as adoption nears a tipping point

She pointed to “a clear bifurcation in medium-term earnings growth algorithms between the secular growth ‘haves’ and ‘have nots’” and predicts that this split will “persist for the foreseeable future.” Therefore, she thinks it makes sense to look at Vertiv’s profile relative to peers, some of which are exposed to a more challenged macroeconomy.

Vertiv supplies electrical and mechanical equipment that goes into data centers, and DeBlase said it stands to benefit from perhaps $7 trillion in overall data-center infrastructure investments that could be made from 2025 to 2030, a number that comes from McKinsey estimates.

The company provides direct-to-chip liquid-cooling technologies, and that market could grow even more quickly that that for general electric equipment since the revenue base is negligible now. Previously, “traditional data centers did not broadly require liquid-cooling infrastructure,” DeBlase said. But AI is very power intensive and requires cooling systems to maximize efficiency.

DeBlase lifted her price target on the stock to $216 from $168, with the new target implying 20% upside. By applying more bullish assumptions, however, she could see the stock hitting $230, or 27% above current levels.

Don’t miss: AMD’s stock just keeps climbing – and it all comes down to this factor

But the growing hubbub around data-center investments now has DeBlase wondering: “Is the bull case bullish enough?” She noted big recent arrangements such as one between OpenAI and Broadcom Inc. (AVGO) and another between OpenAI and Advanced Micro Devices Inc. (AMD), and those are just a few of the newly announced deals.

“While it is impossible to know to what extent projects of this magnitude were already embedded in third-party data-center capacity forecasts, it does seem fair to say that if sizable project announcements continue, the bull case becomes increasingly likely – and the bull case may not even be bullish enough.”

More from MarketWatch: Why Broadcom’s OpenAI deal may not be all it’s cracked up to be

-Emily Bary

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Aptar today announced that it has been named a World’s Top Companies for Women 2025 by Forbes for the fifth consecutive year (formerly World’s Top Female Friendly Companies). Aptar is ranked 72 out of the 400 companies included on the list by Forbes and their partner Statista.

“Being recognized by Forbes for the fifth year in a row is a testament to the strides we’re making in advancing inclusion, equity and belonging across our global teams,” said Shiela Vinczeller, Aptar’s Chief Human Resources Officer. “When we honor and appreciate each person’s unique strengths, we build a workplace where everyone has the opportunity to achieve their full potential.”

“We are proud to be recognized as one of the World’s Top Companies for Women – a reflection of our meaningful progress to further a workplace where everyone is encouraged to participate in numerous events that promote inclusivity,” said Marcia Thomas, Chief Diversity Officer.

This award is presented on behalf of Forbes and Statista, a leading market research firm. Data for the “World’s Top Companies for Women” is based on an anonymous survey of over 120,000 women working in 36 countries. In this survey, participants are asked to evaluate companies based on three areas: employer brand, public opinion and leadership score. These surveys are conducted periodically over a two-year period.

For a full list of the World’s Top Companies for Women and a breakdown of the methodology, please visit the Forbes website here.