This widening gap is attributed to a market trend favoring heavier, more powerful PHEVs with longer electric ranges but insufficient electric motor power. The findings underscore the importance of an upcoming utility factor (UF) correction scheduled for late 2026/27, intended to align official accounting with actual climate impact and encourage improved vehicle performance.
Evidence from a previous UF correction in 2025 suggests that such adjustments can lead to reduced CO2 emissions through technological advancements and extended electric ranges. However, current taxation policies in most EU member states do not adequately differentiate between high-emitting PHEVs and those with better performance, often affording them similar favorable treatment.
Real-world data indicates that PHEVs are driven in pure electric mode only about 27% of the time, and their climate benefits have been overstated. The study also found that PHEVs with longer electric ranges (over 70 km) exhibited a larger emissions gap compared to those with shorter ranges. Conversely, PHEVs with a higher ratio of electric to combustion power demonstrated significantly lower real-world emissions.
The analysis suggests that the 2025 UF correction has already incentivized manufacturers to improve PHEV technology, with some increasing electric range and battery size. These upgrades have largely offset the impact of the UF correction on official CO2 emissions, with only a minor increase in vehicle prices.