Plug-in Hybrids: How new european emission rules are reshaping the game for Citroën

It has become self-evident that Europe, through its regulatory decisions, can sometimes appear to be a restraining force on the automotive industry. Between increasingly stringent and sometimes debated emission standards and the looming 2035 deadline for phasing out new internal combustion engines, another layer of complexity has just been added. The European Commission has announced a recalculation of CO2 emissions for plug-in hybrid vehicles, a decision that, while logical in its premise, is set to profoundly alter the strategies of many manufacturers.

Plug-in Hybrids: the end of an overly favorable emission calculation?

Since their rise in popularity, plug-in hybrid electric vehicles (PHEVs) have faced recurring criticism regarding the significant gap between their officially certified CO2 emissions and their real-world performance. The Worldwide Harmonised Light Vehicle Test Procedure (WLTP), although stricter than its predecessor, the NEDC, has until now granted them a considerable advantage based on a highly optimistic usage assumption. The principle of a PHEV is both simple and effective: it combines an internal combustion engine with an electric motor and a battery large enough to cover several tens of kilometers in a pure electric mode. For this system to operate optimally, however, one major condition must be met: near-daily recharging. It is under this condition that the PHEV unleashes its full potential, enabling most daily commutes to be completed on electric power alone, while retaining the versatility of the gasoline engine for longer journeys. This makes it an ideal solution for drivers who frequently navigate urban or suburban areas but also regularly need to travel long distances without range anxiety. Unfortunately, real-world usage patterns often tell a different story.

A shift to calculations based on real-world data

After a period of slower growth, the market for plug-in hybrid vehicles has recently experienced a strong resurgence, now accounting for nearly 9% of sales in Europe. This renewed interest is largely driven by corporate fleets, which are under pressure to reduce their overall emissions and are attracted by the tax incentives tied to the low official CO2 figures of these models. However, this success may be short-lived. Using data collected from on-board fuel consumption monitoring devices, which track actual fuel usage and charging habits, the European Commission has reached an undeniable conclusion: the assumption that a PHEV completes 80% of its journeys in electric mode is incorrect. Drivers are not recharging as systematically as the theory suggests. Consequently, the "utility factor" used to weight the emission calculations will be drastically revised downwards. Starting in 2025, it will be lowered to 54%, before falling to just 34% by 2028 at the latest. The impact will be direct and substantial: official emission and fuel consumption figures will rise, making these vehicles far less attractive, especially for corporate buyers.

A limited impact for Citroën, and a potential opportunity?

Faced with this regulatory tightening, how is Citroën positioned? I believe that, paradoxically, the brand could emerge as a winner from this situation. The impact of this new measure will be relatively limited for our brand. Citroën's main plug-in hybrid offering is currently the C5 Aircross. Crucially, this model has a major asset in its lineup: a fully electric version, the ë-C5 Aircross. This pure electric option provides a solid and future-proof alternative for companies looking to meet their emission reduction targets, regardless of the regulatory changes affecting hybrids. The situation is quite different for some of our French competitors. I am thinking particularly of Renault, whose recent strategy in the larger vehicle segments relies heavily on plug-in hybrid technology for models like the Austral, Rafale, and Espace, none of which currently offer a fully electric alternative. This change in calculation could therefore weaken their market position, especially within the corporate fleet sector, and potentially allow Citroën to attract professional clients seeking fiscally and environmentally stable solutions.

For the first time, Europe appears to be basing its decision not on the intrinsic technology of a vehicle, but on the real-world data of how it is used by drivers. In essence, it is not the manufacturers who are being directly penalized for a technology's limitations, but rather the consequences of its improper use. One could rightly argue that brands also have a responsibility to educate their customers on how to use these powertrains correctly. Nevertheless, this represents a significant paradigm shift. In the short term, Citroën seems well-equipped to navigate this transition. The brand's electrification strategy, which includes zero-emission alternatives for its key models, is proving to be an effective safeguard. In the long term, this new rule, which will come into full effect by 2028, will force all manufacturers to rethink their energy mix, but in the interim, it could present some excellent business opportunities for Citroën.