Plug-in Hybrids in 2026: Comeback or Phase-Out?
The numbers: a quiet comeback
Many had written off the plug-in hybrid (PHEV) as a stopgap, but 2026 tells a different story. According to the European automobile manufacturers' association ACEA, 758,082 plug-in hybrids were newly registered in the EU between January and August 2026. That is a market share of 10.0%, up from 8.8% in the same period last year.
For comparison, battery-electric cars reached 21.7% and full hybrids without a plug 36.6%. Petrol cars fell to 21.7% and diesel to 7.3%. PHEV growth is being driven mainly by three markets: Italy (+77.6%), Spain (+33.9%) and Germany (+15.6%).
Electrified powertrains are also growing strongly in Austria. According to Statistik Austria, 241,108 new cars were registered between January and September 2026, up 12.1%. Of these, 26.2% were fully electric and 40.6% hybrid. Petrol and diesel cars together accounted for just 33.2%.
There is one catch: Austria's official statistics do not report plug-in hybrids separately. They are counted together with full and mild hybrids under "hybrid", so the exact PHEV share in Austria cannot be read from the monthly figures.
Why plug-in hybrids are growing right now
Three factors are at work:
On paper, a plug-in hybrid has very low CO2 figures. For manufacturers that must meet EU fleet targets, it is an important tool, and often cheaper than selling an additional electric car.
Drivers who can charge at home or at work drive electrically day to day and still have the combustion engine for long trips. For many, it is the step between a combustion car and a fully electric one.
Additional EU tariffs have applied to electric cars from China since late 2024, but not to plug-in hybrids. Chinese brands have expanded their PHEV ranges accordingly. According to industry reporting, Chinese manufacturers already accounted for 28% of all plug-in hybrids registered in Europe between January and July 2026, up around 60%. Around 60% of BYD's European registrations are plug-in hybrids, and Chery has entered the market with PHEV SUVs under its Jaecoo and Omoda brands.
The problem: test bench versus road
The plug-in hybrid's biggest weakness is the gap between official and real-world figures. In September 2026, the International Council on Clean Transportation (ICCT) analysed actual consumption data from around 920,000 plug-in hybrids in Europe, collected by the vehicles' on-board fuel consumption meters.
Plug-in hybrids first registered in 2023 emit on average 4.6 times as much CO2 on the road as officially stated. The official calculation assumes a modern PHEV drives around 80% of its kilometres on electricity. In reality, the figure for 2022 was only about 21%.
For cars first registered in 2021, the factor was 3.5, so the gap is widening. Many vehicles, especially company cars, are simply rarely charged.
The EU therefore plans to adjust the calculation formula, with a further correction scheduled for 2027. Official CO2 figures for plug-in hybrids would then rise significantly, making them less valuable to manufacturers for their fleet targets. The car industry, including Germany's VDA association, is pushing to suspend the change. Whether the 2027 correction goes ahead as planned is currently open.
Three policy decisions that will shape the future
If the correction goes ahead, the plug-in hybrid loses its biggest advantage for manufacturers. If it is postponed, it remains attractive for their CO2 balance.
On 16 December 2025, the European Commission proposed lowering the 2035 target from a 100% to a 90% CO2 reduction, which would allow plug-in hybrids and range extenders to be sold after 2035. This has not yet been adopted: Parliament and member states are still negotiating.
On 9 October 2026, EU Trade Commissioner Maroš Šefčovič announced a preliminary agreement with China that could cut imports of Chinese electric cars and plug-in hybrids by up to 50%. Details have not been published, and EU heads of state and government still have to approve it.
Comeback or phase-out?
Our view: both, just at different times. 2026 is very likely to be one of the strongest years in the plug-in hybrid's history. In the medium term, everything depends on political decisions that have not yet been made.
A split looks likely. Plug-in hybrids with large batteries and genuine electric range have a good chance of keeping a firm place beyond 2027. Models with small batteries built mainly for the CO2 balance, on the other hand, will come under pressure once the formula gets stricter.
What this means for dealers
A plug-in hybrid pays off mainly for customers who can charge regularly. Anyone who never charges is driving a heavy petrol car. Good advice prevents disappointment and complaints.
Demand varies widely from market to market, as the growth in Italy, Spain and Germany shows. For cross-border trade that is an opportunity, because vehicles are in demand wherever taxes and incentives make them attractive.
If import limits come in, the supply of Chinese plug-in hybrids could become tighter.
Until the decisions on 2027 and 2035 are made, the future of the plug-in hybrid remains politically open. Those who can offer several powertrain types are prepared for every scenario.
Sources: ACEA, EU new car registrations January–August 2026; Statistik Austria, new car registrations January–September 2026 (press release of 9 October 2026); ICCT, study on real-world CO2 emissions of plug-in hybrids (3 September 2026), Chinese manufacturers' market shares per industry reporting on the study; Transport & Environment; European Commission proposal of 16 December 2025; statements by EU Trade Commissioner Šefčovič of 9 October 2026. As of 16 October 2026. Political decisions on 2027, 2035 and Chinese imports were still pending at that time. Assessments represent the view of MOTIS FIDUCA and are not investment or purchasing advice.