Extended-Range EVs: Bridging the Gap to Full Electrification
Recent shifts in the electric vehicle (EV) market show a slowdown in sales growth, influenced by consumer concerns about price and range limitations. To counter this, the automotive industry is exploring options to boost adoption, including the re-emergence of extended-range electric vehicles (EREVs). These vehicles offer a potential solution to address range anxiety and cost issues among current owners of internal combustion engine (ICE), hybrid, and electric vehicles.
Addressing EV Market Challenges
Many potential EV buyers are hesitant due to the higher initial cost of EVs compared to traditional ICE vehicles. Concerns about driving range are also a major factor. For those in apartments or homes without easy charging access or drivers planning long trips, the availability of public charging stations can be a worry.
EREVs Versus PHEVs: What’s the Difference?
An EREV is a hybrid of battery-electric vehicle (BEV) and ICE technology. Unlike plug-in hybrid electric vehicles (PHEVs), which use a parallel system, EREVs use a series configuration. This setup includes a small ICE-powered generator to recharge the battery pack. PHEVs typically have smaller battery packs than both BEVs and EREVs. In a PHEV, the ICE functions as a mechanical drive when the battery is low, or if the driver needs extra power. PHEVs typically have an electric driving range of about 20 to 40 miles. They then function as an ICE car. EREVs, on the other hand, can offer a longer electric driving range, often between 100–200 miles, and can also be charged at regular EV charging stations, home chargers, and fast-charging outlets. Their ICE engines can be refueled at traditional gas stations.
In an extended-range electric vehicle, a gas engine and generator extend driving range but are not connected directly to the drivetrain.
Given their ability to alleviate range anxiety and their popularity in China, EREVs are gaining attention from European and U.S. automakers as a way to drive EV sales. EREVs were present in the first wave of electrification, but didn’t take off because early EV adopters were more interested in pure BEVs. Now, as EV adoption moves to mainstream car buyers, the market is open to a wider array of choices.
Surveying Consumer Sentiment
A late-2024 McKinsey survey of new-car buyers in the United States, Germany, and the United Kingdom found that a significant portion would consider an EREV. Two-thirds of these potential buyers indicated they would have purchased an ICE or hybrid vehicle if EREVs weren’t an option. This suggests that EREVs could encourage owners of ICE vehicles to switch to electric driving.
An extended-range electric vehicle option appealed to a significant segment of surveyed car buyers, even those disinclined to purchase electric vehicles.
Addressing ‘Range Anxiety’
Aside from cost, “range anxiety” is a major concern for consumers. This includes worries about EV driving distances, the convenience of charging stations, the frequency of recharging, and running out of power. Interest in EREVs was higher among premium-brand vehicle owners and owners of larger cars and SUVs. Some current EV owners frustrated with charging issues and range are considering returning to ICE vehicles.
Consumer Education is Key
Despite the appeal of EREVs, educating consumers about their benefits and clarifying the distinctions between EV and hybrid options is crucial. Consumers often have difficulty understanding the differences between EREVs, PHEVs, BEVs, and other hybrid vehicles.
EREV Models in the Market
Currently, there are few EREVs available globally. Examples include the 2025 Ram 1500 Ramcharger in the United States, which offers a 145-mile electric range and a 690-mile total driving range, Li Auto’s L9 in China, and AITO’s M9. Scout Motors, backed by VW, has also announced several EREV models. An electric range of 100–200 miles would meet most daily commuting needs, and a total range of 350–600 miles could eliminate range anxiety.
A 100- to 200-mile electric range could meet most commuters’ needs—a potential sweet spot in the extended-range electric vehicle market.
Regulatory and Financial Landscape
The United States regulatory environment may offer the most favorable market for EREVs, despite the zero-emissions deadlines in the European Union. The United States has no such requirements at the federal level, and standards may be more favorable to EREVs. EREVs could provide a cost-competitive alternative to BEVs and ICE vehicles.
Average production costs for extended-range electric vehicles are lower than for battery electric vehicles, but that may change as battery costs decrease.
With an electric range of 150 miles, EREVs could have combined powertrain costs as much as $6,000 less than BEVs. The production costs for EREVs are expected to fall between those for similar-sized BEVs and ICE vehicles. If OEMs can offer attractive EREV price points, this could increase the adoption rate. However, OEMs need to consider the added portfolio complexity involved. EREVs could serve as a bridge between ICE vehicles and BEVs while improving charging infrastructure.
Conclusion
Providing consumers with education and clearly differentiating EREVs from other alternatives is essential. OEMs must achieve a quick time-to-market and carefully plan for any additional development costs. Extended Range EVs could revitalize the industry by providing a balance between cost concerns and reducing range anxiety.
