Shopping for his first family car, Yuan, a 31-year-old Shanghai resident, test-drove pure electric vehicles from Nio and Xpeng, popular EV brands in China. But he was worried about running out of juice and the hassle of charging his car on the go. So instead he tried something new: an extended-range electric vehicle, or EREV. They can go more than 600 miles on a charge compared with the typical 300, thanks to a small internal combustion engine on board whose sole purpose is to automatically recharge the battery. An EREV turned out to be the perfect fit, and in May he paid about $34,000 for a Li Auto L6, a five-seat sport utility vehicle that’s become one of the hottest-selling models in China.
“I had not thought about buying an EREV before,” says Yuan, who wanted to be identified only by his first name over concerns about his government job. “But we won’t have to worry about driving range in case of occasional longer drives or the long queue for charging ports.”
Extended-range EVs have become the fastest-growing propulsion system for cars in China, the world’s largest market for pure battery electric vehicles. Sales of EREVs more than doubled there over the past year and now account for 30% of the country’s plug-in hybrid sales, according to research service Bloomberg New Energy Finance (BNEF). They will begin arriving in America next year when Chrysler-parent Stellantis NV rolls out the Ramcharger, an EREV version of its Ram 1500 pickup truck that it says will have a 690-mile driving range and is being “built to pull an entire skeptical demographic” into the electric age.
As automakers worldwide struggle to persuade mainstream car buyers to go electric, EREVs are emerging as a solution to the two biggest roadblocks to EV acceptance: price and range anxiety. An EREV can be charged by plugging in, like a conventional EV, but it also can be filled with gas to power a small gasoline engine that charges the battery as the car rolls along, dramatically extending how far it can go. Rather than powering the wheels the way it does for a conventional automobile or hybrid, the EREV’s gas engine acts only as an on-board generator. This means extended-range EVs require a battery only about half the size of a traditional EV, which lops about $4,000 off the price of an EREV versus a pure-electric vehicle. And with the engine automatically topping up the battery, long trips don’t have to be interrupted by stops to plug into roadside charging stations.
“It has a smaller battery, 95% of the trips are going to be all electric, and then you don’t have range anxiety,” Jim Farley, chief executive officer of Ford Motor Co., said in late May after returning from a trip to China, where EREVs wowed him. “We really like that solution.”
Because EREVs run on battery power most of the time, they are more environmentally friendly than conventional hybrids, such as the Prius that Toyota Motor Corp. has sold for more than a quarter-century. Conventional hybrids are driven by a gas-fueled internal combustion engine supplemented by a small electric motor that’s charged by the car’s electrical system and kinetic energy captured when the driver applies the brakes. EREVs emit less global warming carbon dioxide because their gas engines run only periodically to recharge the battery. But whereas an EREV’s battery is smaller than a full electric vehicle, it’s larger than the power pack found in a conventional hybrid. That makes EREVs more expensive than conventional hybrids.
Other than Stellantis and the Ramcharger, no automaker has yet committed to fielding an EREV in the US, including Ford. Still, Farley’s enthusiasm for the technology is rubbing off on his executives.
“You can charge when you want to, not when you have to, and that’s a big, big unlock,” says Marin Gjaja, chief operating officer of Ford’s EV unit Model e.
Automotive experts say the technology could be ideal for powering the models Americans love most: SUVs and pickup trucks. Because an extended-range vehicle requires a smaller battery—the single most costly component of an EV—both the vehicle’s weight and price can come down, while its driving time is extended. And the technology doesn’t require any battery breakthroughs. An EREV relies on existing technology that automakers already build: a traditional lithium-ion battery mated to an internal combustion engine.
“It just makes so much sense for the US market because we like our big vehicles and we like to go at high speeds over long distances,” Michael Dunne, a former General Motors Co. executive in Asia and now a consultant specializing in the Chinese market says. “It’s a lifeline to Detroit. They could adopt a practical power-train, reduce costs, increase range and keep their customers happy in their core segments, SUVs and trucks.”
Yet American automakers’ reticence to get EREVs on the drawing board could be connected to how regulators and environmentalists view them. Because a gas-fueled engine is used to extend the driving range of an EREV, it’s considered a hybrid, which the Sierra Club has said it no longer considers green technology. “EREVs could be a harmful distraction that could stall momentum in the crucial transition to zero-emission vehicles,” says Katherine Garcia, the Sierra Club’s director of clean transportation.
It’s unclear how US regulators will classify EREVs, but it seems unlikely they’ll be lumped with pure EVs, which, if made in North America, qualify for government incentives aimed at stimulating sales, such as a tax credit of as much as $7,500.
The “big decision for us as an industry and for regulators: ‘Is that an EV or isn’t it?’” Farley said of EREVs at the Bernstein Strategic Decisions Conference in New York in late May. “Customers are voting; they like these in-between solutions. We still have a lot of work to do with regulators because they’re not there.”
GM actually pioneered EREV technology 14 years ago with the Chevrolet Volt, a small sedan that ran on electric power supplemented by a gas engine. The Volt had an electric driving range of only 40 miles, a fraction of how far today’s EREVs in China can go on battery power. The model didn’t hit sales targets, and GM lost thousands of dollars on every one it sold. The automaker pulled the plug on the Volt in 2019.
“The technology in the Volt was really good for its time,” says Mark Wakefield, co-head of the automotive practice at consultant AlixPartners. “But it was also horrendously expensive, and they put it in an economy car. The classic strategy would’ve been to start at the top, put it in a Cadillac, and then bring it down over time as the price comes down and the capability comes up.”
GM said it will introduce plug-in hybrids into its lineup in 2027, but it declined to say if that will include extended-range electric vehicles. “The challenge with PHEVs and EREVS remains that they’re complicated and costly because you’re engineering two propulsion systems, and you still have tailpipe emissions,” said Jim Cain, a GM spokesman.
America ceded the market for EREVs to the Chinese, just as it did a decade ago with battery technology, which China now dominates. Although big-name Chinese manufacturers such as SAIC Motor Corp. and Zhejiang Geely Holding Group Co. are jumping onto the EREV bandwagon, Li Auto, founded by tech billionaire Li Xiang, leads the market in China for EREVs, with a lineup of SUVs using the technology. Li Auto’s sales surged almost 47% in June, to 47,774 vehicles, driven by demand for its cheapest EREV, the L6 SUV, which starts at $34,500. Li Auto’s vehicle sales more than doubled last year, and the company posted a full-year gross profit of $3.9 billion (27.5 billion yuan).
“Li Auto targets family car buyers,” said Siyi Mi, an EV analyst with BNEF. “Its EREV products provide not only an electric driving experience without worry of range, but also infotainment and advanced driver assist systems tailored to this customer.”
Li Auto’s models have helped make plug-in hybrid vehicles the fastest-growing propulsion system globally, topping full electrics and internal combustion engine cars, according to BNEF. The research service has dramatically increased its estimate for sales of plug-in hybrids, forecasting a peak of 9.2 million sold globally in 2030, up from a previous projection that they would top out at 6.5 million in 2026. Last year about 4.2 million plug-in hybrids were sold worldwide, according to BNEF.
While recently visiting a colleague in China, Wakefield rode in Li Auto’s top-of-the-line L9 SUV and was impressed by more than just its powertrain, which operated in electric-mode for his entire drive. The car also included many high-tech features, such as voice controls for multiple functions including lowering the windows, semi-autonomous hands-free driving that can exit the highway without the driver touching the steering wheel and the ability to park itself with no one at the wheel.
“My colleague pulls up to his condo and says, ‘Watch this,’” Wakefield says. “We both get out, and he says, ‘I can get out of this thing and just go into my condo. I don’t have to park it. It goes down two levels and parks itself.’”
It’s unlikely US car buyers will see anything like that on American roads anytime soon because President Joe Biden is seeking 100% tariffs on Chinese cars and former President Donald Trump is threatening even tougher protectionist measures to keep Chinese-made EVs out. So if American consumers are to gain access to technology that might provide a transition to the electric future, it will be up to the automakers in the US—and their regulators—to pave the way.
“We’ve had a reset driven by customers who are thinking pragmatism wins out over idealism,” says Dunne, the former GM executive. “We rushed into electrics before the charging infrastructure was ready. EREVs would be a natural pivot.”