As battery-electric-vehicle (BEV) sales growth in most markets has slowed, the automotive industry is weighing new methods to accelerate electrification momentum. In addition to plug-in hybrid electric vehicles (PHEV), extended-range electric vehicles (EREVs) have reemerged as one potential solution to assuage range anxiety and cost concerns among current owners of internal combustion engine (ICE), hybrid, and electric vehicles.

Many potential buyers of electric vehicles (EVs) are reluctant to pay a premium to purchase a BEV instead of an ICE vehicle. Alongside price, driving range is a top source of unease among car buyers. For car owners who live in apartments or in other types of homes that lack regular access to overnight charging, as well as for drivers planning long-distance trips, scant public charging can be a concern. And though most drivers have a daily commute of less than 50 miles, others have much longer commutes.

Given their inherent capacity to quell range anxiety and their strong sales momentum in China, EREVs have caught the attention of OEMs in Europe and the United States as one potential way to boost EV sales growth. EREVs were part of the first wave of electrification a decade ago, but they didn’t take off, because innovation-driven early EV adopters were mostly only interested in pure BEVs. EV buying has moved from early tech-savvy adopters to mainstream car buyers who are looking for a broader range of options. While EREVs are similar to PHEVs, they combine a small ICE-powered generator with an electric powertrain and can offer an electric-only driving range of 100 to 200 miles (versus a comparable PHEV’s range of 20 to 40 miles) and a total range of 400 to 500 miles.

McKinsey’s late-2024 survey of more than 2,800 new-car buyers in the United States and 2,300 in Germany and the United Kingdom found that a sizable segment would consider an EREV for their next vehicle purchase if the option were available. What’s more, two-thirds of these potential buyers noted an intent to purchase an ICE or hybrid vehicle in the absence of an EREV option. This indicates that EREVs could motivate more ICE vehicle owners to transition to electric driving.

Currently, there are few EREVs in the global market. In the United States, EREVs in the SUV and truck segment have been announced, including the 2025 Ram 1500 Ramcharger, which reports a 145-mile pure electric and a 690-mile total driving range. In China, Li Auto has introduced several EREVs, including its L9, which reports a 134-mile electric range and an 817-mile total range. And AITO’s M9 reports a 140- to 170-mile electric and 840- to 871-mile total range. VW-backed Scout Motors has also announced several EREV models that, according to the company, have received considerably more deposits than their Terra and Traveler BEVs.

Going forward, there may be significant opportunities for EREV sales in the United States—and in the European Union, despite quickly approaching deadlines for zero-emission vehicles to account for all new-vehicle sales there by 2035.

If focused on providing an electric range of 150 miles, EREV combined powertrain costs could be as much as $6,000 lower than BEV powertrain costs. However, the gap between BEV and EREV production costs will likely narrow as battery costs decrease. The production costs for EREVs are expected to fall between those for similar-sized BEVs and ICE vehicles. In a McKinsey modeled scenario, an EREV pickup truck with a 150-mile electric range and a total range of 500 miles or more could be designed using a 68 kilowatt-hour (kWh) lithium nickel manganese cobalt oxide (NMC) battery pack; a comparable BEV would need a 228 kWh battery pack to deliver a 500-mile range.

Q: What is the key benefit of EREVs compared to other electric vehicle options?

A: EREVs offer a longer electric-only driving range and a total range that can eliminate range anxiety for consumers.

Q: Are there any EREV models currently available in the market?

A: Yes, there are a few EREV models available in the United States and China, with more expected to be introduced in the coming years.

EREVs could help smooth the transition from ICE vehicles to BEVs by serving as a bridge technology for consumers while charging infrastructure is improved and expanded and BEVs become more mainstream and cost-competitive in the global marketplace. Car buyers hesitant to purchase EVs could welcome EREVs as an option, provided manufacturers can make the technology accessible and clearly distinguish EREVs from PHEVs, other hybrid vehicles, and BEVs, particularly in the US market. For OEMs to benefit from adding EREV powertrain technology, achieving an expeditious time to market is critical, alongside careful planning and oversight for additional development costs and more-complex supply chains and production.