BYD and other Chinese carmakers are spearheading a mini-renaissance of plug-in hybrids in Europe, opening a new battleground for western rivals that are campaigning for a longer life for petrol engines.
Although environmental groups allege that, with a combustion engine and a large battery, plug-in hybrids are often more polluting than advertised, many see them as a greener interim option for people who are not ready to switch to electric vehicles.
For legacy carmakers, it is also a segment of the car sector where they can still leverage their competitive edge in traditional engines against Chinese rivals, which are far ahead in EV capabilities and affordability.
However, the European car industry may have already lost the war before it has even begun. While car groups are lobbying hard for Brussels to loosen the region’s 2035 petrol ban to allow PHEVs and other technologies, Chinese brands are already starting to win over consumers with their plug-in vehicles that are cheaper and have longer ranges.
“Today, the European automakers are still not on par with the Chinese on plug-in hybrid technology,” Pedro Pacheco, an analyst at Gartner, said. “If the market were to pivot towards plug-in hybrids in 2035 in Europe, it will still fall into the hands of the Chinese.”
BYD’s Seal U has become the top-selling plug-in hybrid model in the region with a 5.5 per cent market share of the category during the first nine months of 2025, according to Schmidt Automotive Research. In the UK, Chery’s Jaecoo 7 was the best-selling plug-in hybrid in August.
Until recently, European brands which promoted plug-in hybrids have been those on the premium end, including Volvo Cars, Mercedes-Benz and BMW since they are more expensive than petrol and other hybrid models.
But after European tariffs of up to 45 per cent on Chinese EV imports came into effect last year, Chinese carmakers pivoted to selling plug-in hybrids, which are not subject to similar duties.
While Prius-type full hybrids had been cheaper both to buy and run since a traditional engine runs alongside a smaller battery which is not plugged in, newer models of plug-in vehicles from Chinese makers have become more affordable because of their production scale and control over battery supply chains.
The new Omoda 7 plug-in hybrid, for example, will be cheaper than the full hybrids offered by the likes of Toyota and Honda in the UK, with a starting price of £32,000 when it goes on sale early next year.
The model promises up to 56 miles of EV range, compared with 51 miles for Volvo XC60, the second best-selling plug-in hybrid in Europe, which has a starting price of £55,360.
“We always retain approximately 20 per cent battery power within the car so the car can always drive as an EV,” said Oliver Lowe, head of product at Omoda and Jaecoo in the UK. “That’s where we really differ from the legacy manufacturers and their implementation of plug-in hybrids.”
Chery has also continued to invest in increasing the thermal efficiency of its petrol engine. “I anticipate the disparity between the previous plug-in hybrid producers and us will continue to grow,” said Lowe.
In the first nine months of the year, sales of new plug-in hybrids in Europe and the UK increased 32 per cent from a year earlier to nearly 920,000 vehicles, compared with a 25 per cent rise in EVs to 1.8mn vehicles, according to European car industry body Acea.
During the third quarter, PHEVs accounted for 10 per cent of the regional new passenger car market with Chinese carmakers accounting for one in seven new models, according to Schmidt Automotive Research.
Sales of plug-in hybrids started to grow in Europe following a tightening of the EU’s carbon emissions regulations in 2020 but demand fell sharply just three years later as countries such as Germany and France ended subsidies for buying these vehicles.
Despite the latest sales growth, environmental campaigners question whether plug-in hybrids are truly green, with many plug-in hybrids remaining uncharged.
According to research from Transport & Environment research, actual carbon emissions of plug-in hybrids registered in 2023 were nearly five times higher than official figures.
Even if plug-in hybrids were mostly driven in electric mode in daily short trips, Jan Dornoff, research lead at the International Council on Clean Transportation (ICCT), said actual emissions from plug-in hybrids remained high if a few longer-distance trips on petrol were made.
In the longer term, analysts and car industry executives are divided on whether plug-in hybrid technology has a future for an industry already squeezed by the rising costs of EV and battery investments.
Many carmakers have embraced plug-in hybrids to help comply with the EU’s emissions targets. But with the tightening of these rules from this year to better reflect the actual emissions levels, analysts say there will be less incentive for carmakers to sell the vehicles. The surge in sales this year was also helped by the rush by auto groups to push older models before these rule changes.
In Europe, much will also depend on whether plug-in hybrids will be allowed after 2035 — a decision which Brussels is expected to reveal when it announces a package of automotive policies on December 10. While Germany and the car industry have lobbied hard for their inclusion, France and Spain remain opposed.
“It’s much more electric with a backup engine, which is used now and then,” said Volvo Cars chief executive Håkan Samuelsson. “I think it could be a good compromise maybe for legislators as well.”
While Chinese carmakers may shift back to EVs once BYD and others begin local production in Europe, their executives stress that PHEVs are here to stay as long as there is consumer demand.
In China, sales of plug-in hybrids increased from about 240,000 in 2020 to 4.9mn last year, while their share in the new passenger-car market more than tripled to 19.5 per cent in just two years, according to the ICCT. The average electric range of PHEVs in China was 116km last year compared with 78km in Europe and 70km in the US.
But even in the world’s largest car market, there are signs of slowdown as the cost of EVs has come down and battery ranges have become longer. In the first half of this year, the PHEV share of its new electric passenger car sales fell to 38 per cent from 41 per cent year-on-year, marking the first decline in recent years, according to ICCT.
Plug-in hybrids, as a result of their complex structure, were likely to become more expensive than electric vehicles as battery costs fall, said ICCT’s Dornoff.
“I don’t really feel that there is going to be demand for plug-in hybrids at some point,” he added.
Additional reporting by Andrew Bounds and Alice Hancock in Brussels