Authored By: Jaideep Saraswat & Nikhil Mall

Plug-in Hybrid Electric Vehicles (PHEVs) are vehicles that combine an internal combustion engine (ICE) with an electric powertrain consisting of a traction battery, inverter, and motor, either of which can independently propel the vehicle. This makes PHEVs distinct from conventional hybrids, where the battery is usually much smaller, typically in the range of 1.5 to 2 kWh, and is not meant for meaningful all-electric driving. They are also different from Battery Electric Vehicles (BEVs), as they still retain an ICE as a backup power source. One of the most important advantages of PHEVs is that they can be charged externally at a charging station, which is not possible in standard hybrids. This gives them the ability to operate as electric vehicles for most daily commutes while retaining the flexibility of an ICE for longer trips. In that sense, PHEVs are particularly well suited for intracity mobility and for addressing two of the biggest consumer concerns in the EV transition namely range anxiety and charging anxiety.

Globally, PHEVs have already emerged as an important part of the EV transition especially in electric four-wheeler segment. More than 18.9 million PHEVs have been sold to date, accounting for 32.43% of total EV sales, while 6.5 million PHEVs were sold in 2024, representing 54.7% growth over the previous year. China has clearly led the way in both PHEV adoption and product development, with major OEMs such as BYD placing PHEVs at the center of their electrification strategy. However, some concerns have also emerged globally around whether PHEVs are delivering the environmental and usage benefits that were originally expected. A key issue has been limited electric-only range, which often leads to the ICE being used much more frequently than intended. This is where China has taken an important corrective step by tightening requirements for tax incentives, pushing the electric range threshold above 100 km, compared to the earlier level of around 43 km. This change has encouraged automakers to build PHEVs with significantly higher pure EV range. The latest versions from leading OEMs, including BYD, reflect this shift, with much stronger electric-only performance and a reduced dependence on the ICE except in rare or long-distance scenarios. Falling battery prices and improvements in energy density have made this transition possible, and it is exactly this direction that makes PHEVs a more credible bridge technology.

This point is critical because the real promise of a PHEV lies not in simply having two powertrains, but in ensuring that the vehicle can function like an EV for most everyday use cases. If the electric range is too small, then the vehicle becomes more of a fuel-saving hybrid than a genuine electrification solution. But if the pure EV range is substantial, PHEVs can offer the best of both worlds: low-emission urban mobility with the reassurance of an ICE for long journeys use cases for now. That makes them especially relevant in markets where consumer hesitation remains high and charging infrastructure is still uneven.

In India, the PHEV market is still at a very nascent stage. To date, around 124 PHEVs have been sold in India, compared with 4,84,336 BEVs in the passenger vehicle segment. At present, there is only one OEM offering PHEVs in the Indian market, and that is BMW in the luxury segment. The two models available are priced between INR 2 crore and 2.5 crore, with battery capacities ranging from 18.6 kWh to 25.7 kWh6. This is a very narrow market, both in terms of affordability and accessibility. By contrast, globally, PHEVs are often positioned as a practical entry point into electrification, with prices sometimes around 20% lower than comparable BEVs. For a market like India, where a large share of the population falls in the low-to-middle income category, this is an important opportunity. There is a clear need to bring PHEVs into the mass market and not restrict them to the premium segment alone. That would allow consumers to experience the benefits of electric driving without forcing an all-or-nothing leap into full electrification.

This is also where the broader EV debate in India needs to mature. There is a school of thought that sees BEVs as the only acceptable path forward, but that view often overlooks the practical constraints faced by a large number of Indian households. People living in multi-family apartments, rented homes, dense urban neighborhoods, or buildings without dedicated parking often face serious barriers to BEV adoption. For many of them, installing a home charger is not straightforward, and public charging may not yet be reliable enough to fully replace conventional refueling behavior. In such a context, PHEVs can act as a critical solutions enabler. They reduce the risk of adoption, create a smoother transition for consumers, and allow a much larger section of the population to participate in the EV journey.

At the same time, this only works if PHEVs are designed with intention. They should not be treated as a half-step technology with a token electric range. If they are to play a meaningful role in India and elsewhere, they must come with significantly higher pure EV range, robust battery sizing, and a clear use-case logic that prioritizes electric driving for daily needs. That is not a challenge anymore, especially when battery costs are falling and energy density is improving. In fact, the technology now exists to make PHEVs more electric-first than ever before. Seen this way, PHEVs are not a distraction from the EV transition. They can be an important bridge, especially for markets like India, where consumer economics, infrastructure readiness, and real-world usability all matter just as much as technology ambition.

Jaideep Saraswat Associate Director- Clean Power, Electric Mobility and Emerging Technologies, and Nikhil Mall Senior Manager – Clean Energy and Power Sector