Plug-in hybrids are in a unique position right now. While the sales of battery electric vehicles have been steadily increasing over the past few years with policy and infrastructure support designed to favor them, consumers have recently shown that they’re interested in PHEVs, too.
For starters, PHEVs are a bridge between gas cars and BEVs. They have both, a gas engine and one or more electric motors powered by a small lithium-ion battery. The combination allows drivers to cover short distances, typically between 20-50 miles in EV mode only. When the battery depletes, you can either plug it back in or rely on the combustion engine, leaving not much scope for range anxiety.
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PHEV growth outpaces EVs.
To be clear, BEV sales overall still vastly outnumber PHEV sales, but the latter has been gaining some traction in recent years. In part, that's because consumers are concerned about the high costs of owning a BEV and the lack of abundant and reliable charging and range anxiety.
This has led some to believe that PHEVs, and not fully electric cars, represent a more plausible electrified future—at least in the near term. However, research from BloombergNEF's 2024 Electric Vehicle Outlook has some caveats about the rise of such hybrids. It explains how adoption rates are skewed due to high sales mostly outside the U.S., where high-quality options have lured buyers en masse. And it also says that for automakers, increasing their all-electric range is a critical challenge seen as key to wider adoption.
Europe And China Skew Global PHEV Adoption Rates
So are PHEVs back in vogue? Well, the answer is yes, but there's a twist. They have become popular mainly in Europe and China, which together represented 90% of PHEV sales last year. In the U.S., they're not exactly hot sellers.
In Europe, customers have several great PHEV options. The Volvo XC60, Ford Kuga, BMW X1, Porsche Cayenne and Peugeot 3008 were some of the best-selling models in the continent according to JATO Dynamics data (via Statista).
China is a different beast altogether. The country became the largest PHEV market in 2022 thanks to an influx of affordable models from BYD primarily. But many other brands like Li Auto and Geely are also fighting it out for a bigger share of the market.
According to car research firm Autovista24, five of the ten best-selling EVs in China in April 2024 also came in PHEV variants. The best-seller is the BYD Song, offered in both BEV and PHEV variants. BYD sold some 54,300 units of the Song in April 2024 alone. Its 18.3-kilowatt-hour battery allows 50 miles of zero-emissions range whereas the combined range is 671 miles.
Chinese customers are spoiled for choice with hot-selling options like the Aito A9, Denza D9 and BYD Qin Plug. This pushed plug-in hybrids to 30% of new passenger EV sales worldwide last year, slightly up from 2022 levels. In the US, they only hit 19% of all new EV sales in 2023. But that is also a record.
Stellantis sells more PHEVs than any other automaker. Its sales increased by 124% last year, thanks to models like the Dodge Hornet, Chrysler Pacifica Hybrid, Alfa Romeo Tonale, Jeep Wrangler 4xe and the Jeep Grand Cherokee 4xe.
Toyota relies on plug-in hybrids, but not that much. Although, its PHEV sales growth in the U.S. has outpaced BEV sales. In Q1 2024, Toyota’s PHEV sales were up 94%, whereas BEV sales were up 84% (Including Lexus models).
PHEV Range Evolved Over The Years
BNEF found that automakers are increasing the electric range of their PHEVs to meet consumer needs. Globally, the average range of PHEVs rose from 33 miles in 2017 to nearly 50 miles in 2023.
The higher ranges are a result of larger and more energy-dense batteries. The average PHEV battery pack size reached around 15 kWh in the U.S. and Europe in 2023, compared to 26 kWh in China. And among them, the ones offered in the U.S. have the lowest electric range.
Since 2021, the average PHEV range in the U.S. has remained stable, at around 29.8 miles (48 km.) In Europe, it has declined from around 43 miles (70 km) to approximately 38 miles (61 km.)
In China though, plug-in hybrids have surpassed 57 miles (92 km) of all-electric range on average, nearly double what is available in the U.S.
"So when automakers say they want to bring PHEVs to the US, are they really bringing high-quality PHEVs with a longer all-electric range?" Corey Cantor, a senior EV analyst at BNEF, told InsideEVs.
Providing a longer all-electric range, like what's available in China, could push drivers to use their PHEVs in electric mode more frequently, Cantor said. That's key because the environmental benefits of PHEVs can disappear if they're just used like gas vehicles.
"It doesn't mean it's a slam dunk or a sure thing," he said. "But you have a better chance of getting consumers to charge up for longer periods than if you're adding 22 miles and have to be charging it constantly."
What also expanded China's lead was range-extender EVs (EREVs). EREVs primarily run on electric power but have an auxiliary internal combustion engine or generator that recharges the battery when it gets low. This design extends the driving range beyond what the battery alone can provide, reducing range anxiety.
Nearly 30% of China’s PHEV sales were extended-range models in 2023, which have an average range of 79 miles (127 km).
Flawed Real World Usage, Total Cost Of Ownership
The International Council on Clean Transportation (ICCT) found that the real-world benefits of PHEVs and those shown in government testing are vastly different. Their fuel consumption and CO2 emissions, on average, are approximately two to four times higher than what’s seen in testing cycles.
The rated range is high because fuel-economy standards often make assumptions around emissions and electric range use. BNEF says this has to change. “Drawing from real-world data as PHEV penetration grows can help deliver more realistic policy design and tangible climate benefits,” the report states.
If you don’t charge a PHEV regularly, you’re just carrying the dead weight of the lithium-ion battery around. That leads to using more engine power and hence more fuel. This is also one of the reasons their cost of ownership is higher than ICE cars and BEVs.
BNEF said even the most efficient PHEVs are more expensive to own than average gas cars and BEVs. Assuming a 50% electric usage rate, BNEF found that the Toyota RAV4 Prime was still more expensive to own than a Tesla Model Y or a gas-powered or hybrid RAV4.
"From an automaker perspective, you want to get that electric mode utilization as high as you can," Cantor said. That unlocks the benefits of using less battery materials, qualifying for Inflation Reduction Act credits or having to build fewer EV chargers, he said.
"But if the utilization is still too low, then you're just going to be potentially harming the climate," he added.
Contact the author: suvrat.kothari@insideevs.com
Additional reporting by Tim Levin
