Electric Vehicles with ICE Hybrid Technology (EREVs) Capture Interest from ICE Supporters, According to McKinsey

In recent developments, Extended-Range Electric Vehicles (EREVs) are emerging as a promising alternative to traditional Internal Combustion Engine (ICE) vehicles and battery electric vehicles (BEVs). McKinsey, a global consulting firm, has modelled a scenario where 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-kWh lithium-nickel-manganese-cobalt-oxide battery pack. This is significantly more efficient than a comparable BEV, which would need a 228-kWh battery pack to deliver the same range.

The regulatory environment in the U.S. may make EREVs more favorable compared to the EU, where the future of carbon-neutral ICEs is uncertain after 2035. McKinsey identifies the U.S. consumer as the most likely market to drive early growth in EREVs.

EREV technology could help carmakers cut production costs versus BEVs, with a potential cost savings of up to $6,000 for an EREV powertrain compared to a BEV powertrain. This cost advantage, combined with the extended driving range, makes EREVs an attractive option for consumers.

McKinsey suggests that an electric range of 100-200 miles would meet most drivers' daily commuting needs, while a total range of 350-600 miles could eliminate range anxiety. This range is well within the capabilities of many EREV models, such as the 2025 Ram 1500 Ramcharger, which boasts a 145-mile (90-km) pure electric range and a 690-mile (1,110-km) total driving range.

Interest in EREVs is not limited to traditional car owners. McKinsey's survey reveals that there was slightly higher interest in EREVs among current owners of larger cars and SUVs than among owners of smaller cars. Additionally, interest in EREVs was higher among owners of premium-brand vehicles than among mass-market brands.

A key market segment that might embrace EREVs is BEV owners who are considering switching back to an ICE because of frustration with inadequate charging availability and driving range in their vehicles. EREVs offer the benefits of both worlds, providing an electric-only driving range and the convenience of a backup gasoline engine.

Between 13% and 18% of respondents in McKinsey's survey would consider buying an EREV for their next vehicle. This indicates a significant market potential for EREVs. Two-thirds of these potential EREV buyers note an intent to purchase an ICE or hybrid vehicle in the absence of an EREV option.

EREVs combine a small internal-combustion-engine-powered generator with an electric powertrain and can offer an electric-only driving range of 100-200 miles (161-322 km). This makes EREVs a potential bridge technology for consumers challenged by the lack of reliable and cost-effective public charging infrastructure.

Companies like Li Auto, Scout (a brand owned by the Volkswagen Group), Leapmotor, Mazda, and Hyundai are already developing and producing EREV models. The Leapmotor C10 midsize CUV is available in both BEV and EREV configurations, with the EREV variant offering a total range of up to 590 miles (950 km). Hyundai is developing new EREVs capable of traveling over 559 miles (900 km) between charging sessions.

We are already seeing new EREV products coming to showrooms, including the 2025 Ram 1500 Ramcharger and several models from Scout, Volkswagen Group's U.S.-based BEV pickup truck/SUV maker, Jeep, and South Korean automaker Hyundai. As the regulatory environment continues to favour EREVs and the technology becomes more accessible, it is likely that EREVs will become a more common sight on our roads in the near future.