Luxury Brands Losing Ground in the Plug-in Hybrid Market

[Market Landscape] Luxury brands continue to lose share in China's plug-in hybrid market, as domestic brands dominate a blue ocean of nearly 4 million vehicles.

Key Trend: Broadly Defined Plug-in Hybrids Capture Nearly 40% of the New Energy Vehicle Market

In 2025, retail sales of new energy passenger vehicles in China reached 12.809 million units, with a penetration rate of 54%. Among these, plug-in hybrids (including range-extended EVs) accounted for 3.697 million units, representing nearly 40% of the total new energy vehicle market. During the same period, luxury brands maintained minimal presence in this segment and failed to effectively compete.

Strategic Root Cause: Misalignment Between Technology Roadmaps and Local Demand

European luxury brands have long prioritized battery electric vehicles or mild hybrids, overlooking Chinese consumers’ strong preference for plug-in hybrids offering long driving range, low fuel consumption, and freedom from range anxiety. Most of their models are retrofitted from internal combustion engine platforms, delivering pure electric ranges generally under 100 kilometers, which disqualifies them from local policy incentives and leaves them lacking in intelligent features.

Industry Impact: Domestic Automakers Accelerate Premiumization Through Plug-in Hybrids

Domestic players like BYD and Li Auto have rapidly captured the mid-to-high-end market with technologies such as DM-i and range-extended electric systems, forcing joint ventures and luxury brands to revise their strategies—though the strategic window has already significantly narrowed.