The PHEV plateau?
Looking at BEVs and PHEVs separately (middle panel), the difference in PHEV uptake between the markets stands out. In Europe, PHEVs and BEVs followed about the same uptake rate until 2021, from which point the market share of PHEVs stagnated or even declined. This coincided with the publication of our joint Fraunhofer ISI–ICCT meta-study exposing the excessively high real-world emissions of PHEVs. Shortly thereafter, EU policymakers adopted a more realistic test procedure for PHEV emissions and fuel consumption (to be phased in beginning in 2025), and several Member States stopped their purchase incentives for PHEVs.
In China, on the other hand, PHEVs had minimal market share until 2023, when they first crossed the 10% threshold. Within one year, their market share almost doubled to nearly 20%. But in 2025, PHEV sales also stagnated in China, with only 0.8 percentage point growth. In an earlier blog post, our colleagues explained how China is now planning to adapt its test procedure for PHEVs to more accurately reflect everyday driving behavior.
Ironically, while China is tightening its test procedure for PHEVs, very similar to what Europe has already done, PHEVs are excluded from the special tariffs that apply in the EU for electric vehicles from China. As PHEV market share growth in China is slowing down, this coincides with increased sales of PHEVs from China in the EU. Market data from the two largest Chinese brands operating in Europe, BYD and MG, bear out this trend: between 2023 and 2025, PHEVs grew from 0% to 42% of BYD’s sales and from 5% to 10% of MG’s sales in Europe.
A final look at the PHEV share of total BEV plus PHEV registrations confirms the notion of a plug-in hybrid mirage (rightmost panel). While in Europe, PHEVs previously accounted for nearly 60% of all such registrations, that share has continuously dropped before stabilizing at 33%. Meanwhile, in China, PHEVs historically made up less than 30% of NEV registrations; their market share increased in 2023 and 2024 but fell sharply again (by 4.1 percentage points) in 2025. Rather than a Chinese playbook favoring PHEVs, it appears that in both markets, PHEVs are converging toward smaller market shares while BEVs pull ahead.
Evidence over rhetoric
As recent studies from Europe demonstrate, PHEVs come with a number of disadvantages, from high production costs and affordability hurdles for consumers to excessively high emission levels during real-world driving. European policymakers have recognized these shortcomings and adapted their regulatory and fiscal approaches, and market data increasingly illustrate the consequences of these regulatory fixes.
With Chinese policymakers planning to revise the test procedure for PHEVs, it is now becoming increasingly clear that there is no “playbook” favoring PHEVs in China. Instead, the more instructive lesson may be that a truly technology-neutral approach requires acknowledging the limitations of PHEVs and adjusting regulations accordingly. Rather than imagined playbooks, we need policies grounded on solid evidence, such as real-world emissions data.
Meanwhile, that Mercedes may be more heavily invested in PHEVs than any other large manufacturer in Europe—with PHEVs accounting for 20% of the automaker’s new car sales in 2025—may help explain the rhetorical sleight-of-hand used to try and punch a loophole into Europe’s vehicle regulations.
