I’m still smoking: the PHEV emissions scandal continues

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Summary

Analysis of official real-world data from 2024 reveals that plug-in hybrid electric vehicles (PHEVs) continue to show a widening gap between real-world performance and official WLTP (Worldwide Harmonized Light Vehicle Test Procedure) test values. On average, real-world emissions from 2024 PHEV models were almost six times higher than official figures. The widening gap is largely due to the market shift toward heavier, higher-powered, longer-range models that lack sufficient electric motor power. These empirical findings underline the need for the upcoming November 2026/27 utility factor (UF) correction to align official accounting with actual climate impact and incentivize significant improvements in vehicle performance.

The UF plug-in hybrid electric vehicle fix does not pose a threat to European PHEV producers, but rather ensures that PHEV design and performance are improved. Market evidence from the latest 2025 UF correction shows that CO₂ Emissions can be reduced through better technology and greater electric range to offset the increase in official CO.₂ UF correction emissions.

The UF fixes encourage manufacturers to develop PHEVs with longer electric ranges. However, demand also determines which models are successful, and taxes play a key role in influencing buyers’ choices. In most Member States, current PHEV taxation does not prevent high-emission models from receiving more favorable treatment than better-performing PHEVs.

Real-world fuel consumption data reveals that The climate benefits of PHEVs were exaggerated and they have emissions close to those of traditional combustion cars.:

• Average Actual emissions from PHEVs sold in 2024 were 6 times higher than those officially reported in WLTP tests. PHEVs circulate only 27% of the time in purely electric mode.
• Freezing the UF until the 2025/26 correction would imply underestimate real-world emissions by 56%.
• Models with greater autonomy had greater emissions gaps between real-world and official emissions: +52% gap for PHEV with a range greater than 70 km (with the correct UF of November 2026/7) versus a +35% gap for a range less than 70 km. The average range of PHEVs increased from 58 km to 75 km between 2021 and 2024, so long-range models were responsible for more than half of the 2024 gap.
• The relationship between electrical and combustion power is a better indicator of real-world performance than electric range: PHEVs with 25% more electric than combustion power emit only 95 gCO₂/km in the real world, a third of the average PHEV. Emissions in load unloading mode (electric and hybrid operation) were 20 g/km or three times lower than the average for this mode.

Evidence from the recent PHEV model released after the 2025 UF correction suggests that the The UF correction encouraged technical improvements:

• Some car manufacturers have increased the electric range of its vehicles from 63 km to 117 km (+85%) to offset the impact of the first UF correction.
• He Average battery size on updated 2026 models has increased from 14 kWh to 24 kWh, or +68% (compared to previous variants).
• Three quarters of the increase in official CO₂ emissions caused by the corrected UF have been compensation for updated models with a larger batterys. This kept many models below 50 gCO₂/km.
• The largest battery size required for this upgrade It only increased the price of the vehicle by 2%..

T&E analysis shows that by 2030, an electric range of between 140 and 220 km will keep PHEVs at 50 gCO or less.₂/km. This increase in autonomy is consistent with the expected progress in battery and vehicle technology. If PHEVs are equipped with better technology, the necessary increase in range will be limited to about 180 km. The final UF fix beginning in November 2026 not only aligns regulation with real-world performance, thereby correcting a critical regulatory misstep, but also encourages the development of higher-performance PHEVs.

Crucially, freezing the UF is the only change to the car’s CO.₂ framework that would have the greatest impact on BEV sales in 2030 and 2035. In total it would reduce BEV sales by 13 percentage points in 2030 and 18 percentage points in 2035 in the automotive CO.₂ proposal by the EPP rapporteur, Massimiliano Salini.

Current tax systems do not reward better performing PHEVs and they are often treated similar to that of pure electric vehicles:

• Companies They are the main PHEV buyers in Europe. In the first half of 2026, they represented 71% of new PHEV registrations in the EU, well above its 58% share of the global new car market.
• 24 of the 27 Member States provide PHEV with preferential tax treatment through at least one fiscal measure, but only 12 use a threshold ≤50 gCO₂/km or stricter.
• Twenty-one Member States use CO₂ emissions directly in at least one of the five fiscal instruments analysed, meaning that Accurate CO₂ values ​​are essential for effective taxation of PHEVs.
• Only Portugal and Spain require a CO₂ threshold and minimum electric range for PHEV tax benefits, although Spain’s range requirement is particularly weak, at just 15 km.
• In 19 of the 27 Member States, the The annual tax difference between a corporate PHEV and a BEV is almost equal to or less than €1,000.. These countries account for almost 90% of corporate PHEV registrations in the EU.
• Several major PHEV markets barely increase taxation when official CO₂ emissions increase below the UF 11.2026/7limiting both the demand signal for better performing PHEVs and the potential increase in government revenue.

Key recommendations

The EU should maintain the planned correction of the UF PHEV: European co-legislators should not interfere with the next planned and approved correction of the UF in the current discussions on the automobile package.

UF is a technological methodology designed to ensure that official PHEV emissions match real-world emissions. It should not be up to politicians to interfere in the application of this technical methodology. Instead, co-legislators should simply reaffirm their political support for a Robust, science-based system that ensures official emissions accounting reflects real-world performance.

Taxes should complement the UF correction by using stricter CO₂ and electric range criteria to better distinguish between PHEVs. This would ensure that high-emission models are not treated more favorably than better-performing PHEVs..

By Yoann Gimbert, Principal Analyst, Automobiles, T&E

Read the full report.