Plug-in Electric Vehicles (PEVs), encompassing Plug-in Hybrid Electric Vehicles (PHEVs) and Extended Range Electric Vehicles (EREVs) emerged as the most rapidly expanding segments within the Electrified Vehicle (xEV) market in 2024. Despite a stagnation in global Light Vehicle (LV) production due to economic downturns and Battery Electric Vehicle (BEV) chasms in several nations, PHEV and EREV production has surged by 57% and 98%, respectively, positioning them as the leading xEV categories in terms of growth.
The combined global output of PHEVs and EREVs is projected to reach a historic high, surpassing 7 million units in 2024. This represents a 63% increase from 2023 and accounts for nearly 8% of total LV production. The rapid expansion in this sector is largely driven by China’s commanding presence in the market, with the country making up over 77% of global production. The growth in China is propelled by government initiatives, such as the dual-credit system, which categorizes both PHEVs and EREVs as New Energy Vehicles (NEVs), thereby incentivizing manufacturers to enhance their portfolios in these segments. China’s PEV output is projected to reach over 5.4 million units in 2024, marking a rise of 95% from 2023. Outside of China, PHEVs have emerged as a significant xEV option, particularly in the SUV segment and among Premium brands. Meanwhile, EREVs are still in the early phases of adoption.
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Automakers’ shift toward PEVs
Major automotive manufacturers are increasingly concentrating on PHEV and EREV technologies as intermediate steps toward the complete integration of BEVs. This strategic shift aims to mitigate concerns such as range anxiety and lack of charging infrastructure. Presently, numerous new PEVs boast ranges exceeding 1,000 km, surpassing those of conventional Internal Combustion Engine (ICE) vehicles. BYD Auto is at the forefront of global PEV production, with over 2.4 million units in 2024. VW Group, meanwhile, stands as the most prolific PEV producer among non-Chinese OEMs, with a production volume of nearly 320k units during the same period. Other traditional OEMs are also beginning to capitalize on these technologies. Toyota Group regards PHEVs as one of the stepping stones to BEVs, broadening its range with models like the RAV4, Prius, and C-HR, and plans to incorporate the technology into the Corolla Cross and Alphard. Hyundai Group is honing its focus on EREVs, starting with its Genesis brand, while Ford Group is expanding its PHEV offerings in the Pickup and SUV categories.
PHEV and EREV outlook
With strong momentum, growing consumer interest, and increased investments from automakers, PHEVs and EREVs are set to play a crucial role in the global xEV landscape and are projected to represent nearly 11% of total vehicle production by the end of the decade. PEV technology enables the use of smaller batteries compared to BEVs, while maintaining a longer range or supporting heavier loads. Mid- to Large-sized vehicles, especially SUVs, are expected to be the primary models for PHEV adoption. Meanwhile, EREVs are also anticipated to become increasingly competitive in the market soon. Since EREVs utilize electric drive unit technologies similar to that of BEVs, the research and development period and associated costs are likely to be lower than those for PHEVs. Furthermore, OEMs that currently only produce BEVs are expected to favor the development of EREVs as an alternative offering.
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However, despite their rapid rise, the long-term dominance of PHEVs and EREVs remains uncertain. The global push for Zero Emissions Vehicles (ZEVs) is accelerating, and with countries tightening emissions regulations and BEV infrastructure improving, the growth of PHEVs and EREVs could decelerate in the forthcoming decade.
Methin Changtor, Senior Manager, Asia Powertrain Forecasting, GlobalData
This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center.
