The findings highlight the critical need for the upcoming November 2026/27 utility factor (UF) correction, designed to align official accounting with real-world 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 superior performance. This lack of distinction, coupled with company car purchases dominating the PHEV market, means that less efficient models often receive preferential treatment.
Analysis indicates that PHEVs are driven in pure electric mode only 27% of the time. Models with longer electric ranges, exceeding 70 km, exhibited a larger emissions gap compared to shorter-range vehicles. Conversely, PHEVs with a higher ratio of electric to combustion power demonstrate significantly lower real-world emissions.
Recent PHEV models launched after the 2025 UF correction show manufacturers are increasing electric range and battery size to offset the impact of UF adjustments. This has led to improved efficiency, with increased battery size only marginally affecting vehicle price. Projections suggest that electric ranges of 140–220 km will be necessary for PHEVs to remain at or below 50 gCO2/km by 2030.
The study urges European co-legislators to uphold the planned UF correction, emphasizing that it is a technical methodology to ensure accurate emissions reporting. It also recommends that taxation systems be revised to incorporate stricter CO2 and electric-range criteria, ensuring that better-performing PHEVs are appropriately rewarded.