Toyota unveiled a concept called the Prius (Latin for “to go before”) at the 1995 Tokyo Motor Show. When the production Prius launched two years later, it was the first volume production gas-electric hybrid vehicle. That hybrid technology laid the groundwork for Toyota’s “green” business and has endured for the last thirty years. Hybrid technology has now been utilized by nearly every global automaker.

Electric vehicles have become a threat to hybrids. EVs are simpler (one powertrain, not two), quieter, and have zero emissions. Many of the world’s automakers have moved toward an all-EV future, motivated by the success of Tesla.

Unfortunately, reality has a way of interfering with the best-laid plans. Supply-chain challenges, range restrictions, inadequate infrastructure, and cost constraints all have impacted consumer demand. While EV sales have generally been on an upswing, it’s a shallower curve than many anticipated, leading to several new technological developments in the gas-electric hybrid space. It’s also forced many automakers to pivot, rethinking their “all-EV” goals and bringing hybrids back into their showrooms.

New Technologies

Recall the Chevrolet Volt (and the original Fisker Karma, and BMW i3 REx). Those vehicles were series hybrids; unlike parallel hybrids (like the Prius), the gasoline engine was never intended to drive the wheels*. It charged the battery, which powered the electric motor(s), which drove the wheels. These extended-range EVs (EREVs) drove like an EV all the time, unlike conventional plug-in hybrids (PHEVs), where the gas engine kicked in at higher speeds or under strong acceleration. When the battery runs low on an EREV, the engine turns on to charge the battery.

Global supplier ZF says that EREVs are a better bet than PHEVs; range-extending gasoline engines are cheaper to build, have shorter development cycles, and use simpler supply chains. In addition, because the engine isn’t attached to the wheels, it can always operate at its most efficient engine speed, optimizing fuel economy and emissions. ZF is bringing their new system to market next year (with an unspecified automaker); with power output up to 201 hp.

An even better idea comes from Horse Powertrain, a supplier jointly owned by Renault, Geely, and Saudi Arabia’s Aramco: it retrofits EVs into EREVs. Horse Powertrain packages an internal combustion engine, an electric motor, and a transmission, to fit in the space of a front-mounted EV drive unit. It bolts directly to the subframe, so you can theoretically build EVs and EREVs on the same line. They claim to be targeting a 2028 launch – again, with an unspecified automaker.

New Strategies

Genesis had originally targeted an all-EV portfolio by 2030, explicitly stating their intention to skip hybrids and go straight to EVs. Fortunately, parent company Hyundai has considerable experience in hybrid technology, and the next generation of Genesis products due in the next few years will offer both hybrid (without a plug) and EREV technology. The latter uses Hyundai’s new two-motor setup (one generator/drive motor and one drive motor) on a rear-wheel-drive-biased platform. Two turbocharged L4 engines will be used: 2.5L or 1.6L.

BMW was early to market with the now out-of-production i3 REx, and is rumored to be considering an EREV option for the next-generation X5 midsize SUV due in 2026. They are reportedly working with ZF (which may be the unnamed automaker referenced earlier). This would mark a shift from what BMW’s CEO told investors last year: “To have a very large battery plus a combustion engine in there – there is a limit to the financial logic. Our PHEVs are currently around the 100-kilometre [range], which I think is the perfect point where the customer says, ‘This is what I would like to pay for.’” The technology is also being considered for the smaller X3 and larger X7.

China’s BYD sees an opportunity for better PHEVs to counter the rise of EREVs. Their next-generation system, due in the next one to two years, promises 124 miles of EV range (about 90 miles on the EPA cycle), far higher than most PHEVs today. In addition, while most PHEVs have simple, slow AC charging (e.g., just plugging it into a conventional socket), these new PHEVs will have DC fast charge capability up to 150kW, comparable to many mid-range EVs today. BYD’s special adviser for Europe, Alfredo Altavilla, believes PHEVs are better than EREVS: “You can have three different ways of using the car; it’s your decision, depending on how much power you need from the engine, [whereas] the REx is always behaving in one way.”

Britain’s Lotus, now owned by Geely, announced a four-EV portfolio several years ago (with two models already in production). In addition to electrifying (rather than dropping) their gasoline-powered Emira sports car, they will now be adding a new Hyper Hybrid PHEV to their portfolio, beginning with the Eletre SUV. They claim an EV range of 186 miles (about 140 miles on the EPA cycle), and a fast-charge time of 12 minutes.

Finally, VW Group surprised the entire industry by noting their new Scalable Systems Platform, which is expected to launch in Europe with an Audi entry in 2027, to include an “option for range extenders.” VW has reportedly “frozen” the architecture, which will be offered in eight variations across VW’s entire brand portfolio. They haven’t said anything more, aside from noting that EREVs are probably more appropriate for larger vehicles in China. VW’s CEO said, “It’s an expensive technology, and from a drivability and cost point of view, it makes no sense to have both range-extenders and plug-in hybrids.”

Looking Ahead

BloombergNEF has noted the following developments and strategic pivots. Their 2025 Electric Vehicles Outlook stated that 2024 EREV sales jumped 83% over 2023, with plug-in vehicles (EVs, PHEVs, and EREVs) jumping from about 7% to 10%. PHEVs are also becoming increasingly popular, with sales jumping 64% from 2023 to 2024.

This is good news for consumers, who are now being offered more choices of clean, fuel-efficient, and fun-to-drive powertrain technologies, no matter what kind of vehicles they are interested in.

*The Volt was originally described this way, but the public eventually learned that under rare conditions, the gas engine actually drives the wheels.