Plug-in Hybrid Electric Vehicles (PHEV)s Market Size, Share, Growth, Trends, and Global Industry Analysis: By Power Source (Stored electricity, On-Board electric generator), By Powertrain (Series Hybrid, Parallel Hybrid, combined Hybrid), By Vehicle Type (Passenger Cars, Commercial Vehicles, two Wheelers, Others) and Region Forecast 2020-2031

Plug-in Hybrid Electric Vehicles (PHEV)s Market size was valued at US$ 7,800 million in 2024 and is expected to reach US$ 14,200 million by 2031, growing at a significant CAGR of 12.5% from 2025-2031. Moreover, the U.S. Plug-in Hybrid Electric Vehicles (PHEVs) Market is projected to grow significantly, reaching an estimated value of US$ 5,300 million by 2031. Plug-in Hybrid Electric Vehicles (PHEVs) are emerging as the strategic middle ground in the world's transition away from internal combustion and towards all-electric mobility. Between conventional vehicles and battery electric vehicles (BEVs), PHEVs provide the pragmatic benefit of dual propulsion, electric power augmented by gasoline-fueled range extension. This dual-mode design appeals to broad sets of consumers, especially in those markets where charging infrastructure is still under development.

As regulatory systems constrict tighter around fuel economy and emissions requirements, PHEVs are not merely compliance options, but an operating, near-term solution to consumers and manufacturers working within the complexity of range anxiety, energy transformation, and sustainability stress without sacrificing driving freedom. The market stands out for its capacity to benefit from both the incentives of electrification and consumer experience with combustion technology. North American, European, and Asian governments continue to provide policy incentives in the form of subsidies, tax credits, and access benefits in urban areas, driving adoption.

At the same time, improvements in battery energy density and regenerative braking technology are optimizing overall efficiency for PHEVs so that they are no longer transitional technologies in themselves, they are now optimizing, standalone vehicles. While manufacturers step up electrified lineups without abandoning gasoline systems entirely, PHEVs are in themselves a main product category balancing market readiness and innovation velocity.

Facts & Figures

• PHEVs now account for more than a third of the total hybrid and electric car sales in Europe because of favorable tax conditions, urban access advantages, and city driver adjustments to charging habits.
• Future-generation PHEVs have seen electric-only range expand by more than 60% since 2019, allowing many buyers to travel on pure battery alone for their normal daily journeys without the need to switch on the combustion engine
• China dominates worldwide PHEV production capacity, with local companies offering plug-in hybrid versions in mid-size and premium SUV segments to balance range and conformity requirements
• Automakers are tactically utilizing PHEVs as bridging vehicles to address increasingly stringent fleet-average emissions regulations by making periodic use of them as stepping stones in electrification strategies to insulate against glacial adoption of BEVs in infrastructure-limited markets.                 

Key Developments:

• In June 2025, Geely Galaxy M9: Released in Milan, the Galaxy M9 is a full-sized SUV with Geely's NordThor AI Hybrid-2.0 EM-P powertrain. Offers up to ~185-km electric range and high-tech interior with 30″ display and lidar?based AI agent. Begins production in 2025.
• In February 2025, China's subcompact sedan launched in January, powered by BYD's fifth-generation DM-i plug-in hybrid technology (e-CVT platform, blade-type LFP battery). On sale from February 10, with a maximum electric-only range of up to ~100–120-km, and equipped with advanced driver-assistance tech.

Plug-in Hybrid Electric Vehicles (PHEV)s Market segmentation:

Based on the power source:

• Stored Electricity
• On-Board Electricity Generator

Stored electricity is still the foundation of PHEV powertrains, leading to mass adoption owing to relative complexity, scalability, and availability of existing charging infrastructure. In this sub-segment, the energy is stored in lithium-ion batteries with high density, enabling vehicles to run in full-electric mode over shorter distances and seamlessly move to internal combustion as needed. The attractiveness of such a setup lies in its capacity to greatly lower fuel use without calling for the total behavioural change of consumers. Consumers take pleasure in the comfort of home or roadside pump charging. With improving battery technology, faster and higher density charging, stored power is the preference, particularly among city dwellers who value cost savings and sustainability.

Based on the powertrain:

• Series Hybrid
• Parallel Hybrid
• Combined Hybrid

Stored electricity is still the foundation of PHEV powertrains, leading to mass adoption owing to relative complexity, scalability, and availability of existing charging infrastructure. In this sub-segment, the energy is stored in lithium-ion batteries with high density, enabling vehicles to run in full-electric mode over shorter distances and seamlessly move to internal combustion as needed. The attractiveness of such a setup lies in its capacity to greatly lower fuel use without calling for the total behavioral change of consumers. Consumers take pleasure in the comfort of home or roadside pump charging. With improving battery technology, faster and higher density charging, stored power is the preference, particularly among city dwellers who value cost savings and sustainability.

Based on the vehicle type:

• Passenger Cars
• Commercial Vehicles
• Two wheelers
• Others

Passenger cars dominate the PHEV landscape, driven by rising urbanization, growing environmental awareness, and demand for daily-use vehicles that blend convenience with sustainability. Within this segment, mid-size and compact sedans and SUVs are leading the charge, offering flexibility for both city and suburban use. Automakers are aligning their product strategies with consumer expectations, developing PHEVs that offer extended electric-only range, intelligent regenerative braking, and premium infotainment systems. This segment benefits from favorable tax incentives and urban regulations, especially in markets like the U.S., China, and parts of Europe. Increasing interest among first-time EV buyer’s positions PHEV passenger cars as an accessible gateway to electric mobility without range anxiety.