Intelligent Driving Accelerates Decline of Hybrids, Ries Consulting Calls Them the "New ICE Vehicles"

At the High-Level Forum on Intelligent Electric Vehicle Development held on April 11–12, 2026, Zhang Yun, Global CEO of Ries & Partners, stated that as advanced intelligent driving technologies rapidly evolve, internal combustion engine (ICE) vehicles—and even hybrid models, including super hybrids—will be phased out at an accelerating pace. The core reason lies in the fact that electric vehicle architectures significantly outperform ICE architectures in terms of response speed and electronic control capabilities, making them far better suited to meet the demands of autonomous driving systems. Zhang noted that the automotive industry currently faces a dilemma of “increasing volume without increasing profitability,” rooted in severe product homogenization and a lack of genuine strategic innovation among automakers. He emphasized that future competition will no longer hinge on incremental improvements in energy sources, but rather on category innovation driven by “super technologies” such as AI and autonomous driving. Only companies like Tesla and XPeng, which consistently invest heavily in developing proprietary intelligent driving technologies, stand a chance of securing a foothold in the era of driverless mobility. Regarding traditional joint-venture brands, Zhang argued that the brand equity they built during the ICE era has now become an obstacle to their transition into new energy vehicles (NEVs). Consumers find it difficult to associate legacy premium brands like BMW, Benz, and Audi (BBA) with cutting-edge intelligent technologies. Therefore, if traditional automakers aim to build competitiveness in the NEV market, they must launch entirely new brands. Zhang also highlighted that China’s NEV industry already possesses globally leading supply chains and manufacturing capabilities, along with advantages in application scale and open-source ecosystems in the integration of AI and automobiles. Citing XPeng’s success in the European market as an example, he illustrated how Chinese brands can achieve a “generation-ahead” brand premium through technological innovation. He reiterated Ries & Partners’ core thesis: companies must either compete on price or create meaningful differentiation; only through authentic category innovation can they escape cutthroat competition and capture differentiated profits. Additionally, Zhang analyzed the entry strategies of tech giants like Huawei and Xiaomi into the automotive sector, asserting that their success still hinges on adhering to the principles of category innovation. For instance, Aito’s breakthrough after shifting from pure electric to extended-range electric vehicles aligned precisely with consumers’ then-prevailing desire for EVs free from range anxiety. Similarly, Xiaomi’s single-hit strategy with the SU7 model conforms to the principle of focusing on a new category. Finally, Zhang predicted that the widespread adoption of intelligent driving will fundamentally reshape human mobility, transforming autonomous vehicles into entirely new mobile living spaces. In this transformation, hybrid vehicles—due to architectural limitations—will ultimately fail to meet the requirements of advanced intelligent driving and, like ICE vehicles before them, will be marginalized by the market.