As demand for electric vehicles slows down, automakers around the world are scrambling to build more hybrids, which have become increasingly popular. The eco-friendly alternative to traditional internal combustion engines appeals to a diverse set of consumers who have shied away from buying EVs due to battery concerns, range anxiety and high price tags.

Hybrids have been around since Toyota’s groundbreaking Prius debuted 27 years ago. Today, they’re available in a variety of architectures, including full hybrids, mild hybrids and plug-in hybrids.

Each type utilizes a blend of gas and electric power, but in different ways. Mild hybrids, for example, supplement the engine with a small electric motor to improve fuel efficiency, while full hybrids can alternate between gasoline and electric power or combine them as needed. Plug-in hybrid electric vehicles (PHEVs), which use larger lithium-ion battery packs that can be charged from the grid, enable pure electric driving as a primary mode of operation.

Hybrid options are offered on everything from sports cars to sport utility vehicles and sedans to minivans. Each offers significant improvements in fuel economy and lower emissions due to a combination of gasoline engines, high-voltage batteries and electric traction motors.

diagram of a hybrid vehicle

Hybrid vehicles offer significant improvements in fuel economy and lower emissions due to a combination of gasoline engines, high-voltage batteries and electric traction motors. Illustration courtesy National Renewable Energy Laboratory

Hybrid vehicles also benefit from regenerative braking, a process that converts kinetic energy back into electrical energy. This reversible process allows the motor to act as both a driver and generator, providing an energy boost that assists the combustion engine during acceleration.

“The goal with a hybrid is to allow the engine to operate closer to its most efficient range,” says Sam Abuelsamid, principal research analyst at research firm Guidehouse Insights. “The electric motor helps optimize efficiency by filling in torque gaps, especially at low speeds.”

The modern parallel hybrid vehicle design was originally conceptualized in the 1960s by TRW. However, it only became practical in the mid-1990s with advancements in batteries, electronics and power management systems.

Today, automakers and suppliers are still investing in hybrid vehicle R&D. With the help of increased digitalization across the automotive ecosystem, hybrids minimize fuel consumption by considering a driver's preferences at any given moment.

 

hybrid power train

Hybrid power trains combine elements of both electric vehicles and internal combustion engine vehicles. Photo courtesy Honda Motor Co.

Optimizing Fuel Efficiency

A hybrid power train can operate independently of vehicle connectivity, focusing instead on optimizing fuel efficiency through electronics that manage the flow of power between the engine and the battery.

“The hybrid system doesn’t have to depend on connectivity,” explains Abuelsamid. “It can rely on sensors and electronics to balance power based on factors like speed, load and driver input.”

Using an engine map, the system continuously evaluates how much power to draw from the engine vs. the battery, adjusting in real time to minimize fuel consumption while maintaining performance.

However, added connectivity can enhance this functionality, especially when integrated with navigation. For example, if a vehicle detects an upcoming hill using terrain data, it can draw extra power from the battery to reduce engine strain. After cresting the hill, regenerative braking will recharge the battery on the descent, extending battery life by keeping it within an ideal charge range.

“There are ways you can make the system smarter using additional information beyond just what you have at the vehicle level,” says Abuelsamid. “The digitalization of this process is critical, allowing the system to make decisions about power blending that increase efficiency. It’s programmed to hit the optimal level of efficiency, blending power from the battery and engine based on the driver’s acceleration or braking requests.”

Another aspect of power management is the combination of performance, which integrates the combustion engine and electric motor to balance smoothness and responsiveness during engine engagement and gear selection.

 

e-drive

This e-drive is used to power hybrid versions of Porsche sports cars. Photo courtesy Porsche AG

Producing Porsches

German sports car giant Porsche AG produces its Panamera sedan and Cayenne SUV as PHEV models.

The Panamera, including its six PHEV variants, is assembled in Leipzig, Germany, while the Cayenne is made in Bratislava, Slovakia.

“We tried to incorporate as much of the PHEV assembly in the regular production line alongside with ICE variants and battery electric vehicle (BEV) models,” says Volker Schöning, director of production planning assembly at Porsche.

With the Panamera, for example, the entire production process—from body assembly to paint shop and quality inspection—for all variants, no matter if ICE or PHEV, is identical. They are all assembled at one production line along with the Macan BEV and ICE variants.

Porsche uses automation to a large extent on its mixed-model assembly lines, which are designed for extreme flexibility. Automated guided vehicles play an important role in transporting a mix of different components.

The goal is to maintain high flexibility during production and integrate PHEV models seamlessly with other power train variants.

“The only limitation in production steering we have is that at the Leipzig plant we cannot produce two PHEV models in sequence,” notes Schöning. “Other than that, the integration of PHEV cars into the assembly process follows the same pattern as any other vehicle we produce at the plant.”

Therefore, it makes no difference for the assembly facility if the PHEV is a short- or long-wheelbase model, if the PHEV is combined with a V6 or V8 engine or for which market the car is destined.

“That’s why we can produce all vehicle and drivetrain types on one assembly line,” says Schöning. “This gives our factory more flexibility to react to customer demands, increases our efficiency and helps us to reduce investment costs for additional production equipment.

“Together with our R&D colleagues, we are looking into production [methods that will] allow us to further increase energy density of the batteries, while at the same time reducing assembly time and complexity of the hybrid vehicle components,” says Schöning.

 

Next-Generation Hybrid Systems

Toyota produces around a dozen hybrids in the United States, including the Camry sedan. In fact, that popular vehicle, which is assembled in Georgetown, KY, is now only available as a hybrid. By optimizing the timing of power sources of electric and internal combustion, the automaker can provide customers with the advantages of both systems.

“This approach has been evident since the introduction of the first-generation Prius, and we continue to learn from that experience,” says Dante Boutell, vice president of power train control at Toyota Motor North America.

On the latest Generation-5 hybrid system, Toyota engineers implemented strategies to further improve fuel economy, including delaying the engine ignition timing for an extended period during warm-up, which heats up the catalyst sooner. They have also expanded battery input and output capabilities, reducing the frequency of engine starts during a typical driving cycle.

When it comes to noise and vibration linearity, Boutell says one risk of a power split architecture is that the engine sound does not match the driver’s power request. “To address this, we reserve some of the battery capacity during periods when the engine is already operating quietly, allowing us to shift that energy to times when we want to reduce the engine sound,” he points out.

In the latest Generation-5 system for the 2025 Prius, Toyota engineers focused on refining multiple components to achieve major performance improvements.

“With Generation-5, we have taken the approach of many small improvements to make a big system improvement,” explains Brian Schneidewind, vice president of power train design at Toyota Motor North America.

Some of these key advancements include enhancements to the motor, engine, transaxle, power conversion unit and battery. For example, the motor has doubled its magnet count per pole, moving from three to six magnets, which allows for more efficient power generation. Shorter copper wire windings further reduce resistance, adding to the motor’s output.

Additionally, the engine has been upgraded from a 1.8-liter to a 2-liter, improving thermal efficiency, while the transaxle benefits from a new transmission oil that is half the viscosity of conventional oils. “This significantly boosts efficiency,” claims Boutell.

The power conversion unit now uses a low-loss reverse conducting insulated gate bipolar transistor, a semiconductor device combining the high efficiency of a metal-oxide-semiconductor field-effect transistor with the high power handling capabilities of a traditional bipolar transistor. This reduces electrical losses by 13 percent.

e-drive

Batteries are an important component in hybrid vehicles. Photo courtesy Porsche AG

However, Boutell believes that the most impactful decision was the redesign of the hybrid battery.

“By increasing the contact area between the electrode and electrolyte, and shortening the distance between electrodes, we have achieved a 16 percent improvement in power density,” he explains.

Together, these upgrades have led to system-wide benefits, including a 1.6 times increase in system power from 90 kilowatts (kW) to 146 kW, which gives the vehicle an acceleration experience like a BEV.

The new system also delivers a 10 percent fuel economy improvement, boosting mileage from 49 mpg to 54 mpg on all-wheel drive (AWD) Prius models. Meanwhile, optional rear-motor AWD provides better handling in dry conditions and improved traction on ice, while acceleration feels more responsive and linear, enhancing the driving experience across varied conditions.

SEAT, a division of Volkswagen AG, has made a PHEV version of its Leon compact car in Europe since 2020. After establishing a power train structure and an operating strategy aligned with the character of its vehicles, the goal of the brand is to seek ways to improve on previous technologies or those of previous generations.

“For example, the electric range of the Leon PHEV has almost doubled compared to its predecessor, while using the same battery volume,” says Pablo Torrellas, head of e-drive and energy systems at SEAT. “With an all-electric range exceeding 62 miles, the charging capabilities have been optimized, increasing up to 11 kW for AC charging and up to 50 kW for DC charging.

“Additionally, improvements have been made, like the optimization of the internal cooling of the electric motor's inverter and enhancing the braking system for electric energy recovery,” adds Alicia Molina, head of process engineering at SEAT.

According to Molina, there is still room for improvement in optimizing the weight and volume of components, as well as reducing their costs. “The combination of an electric system with a combustion engine opens up new avenues of innovation,” she points out. “All advancements in purely electric vehicles benefit future PHEV technologies, but continuous advances in combustion engines will also improve the efficiency and performance of hybrid systems.”

 

Nissan’s e-Power system

Nissan’s proprietary e-Power system provides an EV-like experience without full battery reliance. Photo courtesy Nissan Motor Co.

A New Direction in Hybrid Technology

Nissan Motor Co.’s development of hybrid technology represents another approach, particularly with its proprietary e-Power system, which offers an EV-like experience without full battery reliance. Unlike traditional hybrids, which combine electric and combustion engines, it only uses the gasoline engine to generate electricity.

This design is made possible by integrating a high-voltage battery with a power train that includes a high-power motor, an inverter, a gasoline engine and a generator. Nissan views it as a bridge between ICE vehicles and full EVs.

“E-Power is born from EV experience, where most hybrids are [evolved] from an evolution of an internal combustion engine,” says David Moss, regional senior vice president of research and development at Nissan. “It’s about capturing the modern driving feel of an EV, but for customers not ready to fully transition to electric.”

This EV-inspired driving experience was shaped by consumer feedback on the elements of EVs they appreciate most—quietness, smoothness and instantaneous acceleration.

Wheels are driven entirely by an electric motor, while a small onboard gasoline engine powers a generator that produces electricity. It maintains a stable, quiet operation since its speed is independent of the car’s movement, allowing for a more linear, EV-like experience.

By decoupling the engine from the drivetrain, Moss says the system can optimize the start timing and maintain the engine at its most efficient rpm.

“We wanted to create a seamless drive where the engine and electric power interact smoothly, eliminating the noise and gear changes of traditional hybrids,” explains Moss. “It’s about harmony and consistency in the drive.”

Moss believes the e-Power system is critical for markets where EV infrastructure is still developing, allowing the company to introduce electrification benefits without requiring customers to rely solely on charging stations.

Nissan currently makes several hybrids that are sold in other parts of the world. However, it plans to add one to its U.S. stable for the 2026 model year with the Rogue SUV, which will share components with the Mitsubishi Outlander PHEV.

 

Hybrid vehicle architecture vs. all-electric vehicle architecture

Hybrid vehicle architectures (right) borrow elements from all-electric vehicles (left), such as batteries and traction motors. Illustration courtesy National Highway Traffic Safety Administration

Hybrid Assembly Challenges

Hybrid vehicle assembly is significantly more complex than traditional ICE or fully electric vehicles.

“With hybrids, you’re dealing with an internal combustion engine and its related systems, a fuel system, a complex transmission with gears, an electric motor, a battery and high-voltage wiring,” says Guidehouse Insights’ Abuelsamid. “This combination of systems requires more intricate assembly steps and precise integration compared to single-drivetrain vehicles.”

Despite the added complexity, hybrid vehicles are commonly assembled on the same production lines as ICE vehicles, with major automakers such as BMW, Hyundai and Toyota manufacturing their hybrids alongside combustion models. This approach enables them to flexibly adjust production based on demand, while minimizing the need for specialized assembly lines.

“We produce fully electric, hybrid and combustion engine cars all on the same line,” says Jochen Diernberger, senior manager of corporate communications at BMW’s flagship plant in Munich, which produces vehicles such as the 3 Series.

BMW consciously decided not to dedicate single assembly plants exclusively to electric or hybrid vehicle production. That built-in flexibility enables the automaker to scale volume up or down as demand fluctuates across regions and markets. For instance, the 102-year-old Munich plant can shift between producing fully electric vehicles like the BMW i4 to plug-in hybrids and traditional combustion vehicles without disrupting workflows.

Hybrid production also posed challenges for SEAT engineers. For instance, the introduction of hybrid technology several years ago increased the complexity of production and logistics processes at the company’s Martorell factory, which is located near Barcelona.

According to Molina, this is mainly due to the new larger transmission, the weight of the battery, the complex wiring, the larger cooling system, and the need for advanced product knowledge and compliance with safety standards. “The main challenges stem from the integration of an electric propulsion system into a conventional combustion vehicle,” she points out.

This involves installing a larger and heavier transmission that accommodates both an electric and a combustion engine, which requires adjustments to the assembly and handling processes. Handling the battery is also a challenge, because it requires ergonomic equipment for efficient installation. In addition, dual power systems need separate electrical and fuel charging mechanisms, which poses wiring challenges, especially in tight frontal areas.

“Last but not least, strict compliance with safety protocols for high-voltage batteries must not be forgotten, which requires training and knowledge of safety standards,” notes Molina. “This fact forces [our] planning teams to look for [ways] to make it technically feasible and, at the same time, more efficient.”

Janette Hostettler, vice president of manufacturing at Toyota Kentucky, agrees that the complexity of components, supply chain management and cost considerations are all challenging aspects of assembling hybrid or electrified vehicles. In addition to the Camry sedan, her facility in Georgetown, KY, makes hybrid versions of the Toyota RAV4 and Lexus ES 350.

“The integration of hybrid technology increases manufacturing costs,” says Hostettler. “Capital investments, more complicated assembly processes and specialized technologies all impact the ability to produce vehicles cost effectively.

“We will continue to adapt processes, invest in team member training and grow the supply chain to meet our goal of launching electrified versions of every Toyota vehicle globally in 2025,” notes Hostettler, pointing out that the automaker has sold more than 7.2 million hybrid vehicles in North America since 2000.

“As technology evolves, the role of [advanced materials and components] will likely expand, driving further innovation in the automotive industry,” explains Hostettler. “We have worked diligently over the past two decades to improve systems and processes for producing hybrid products.”

 

Nissan’s X-in-1 systems

Nissan’s X-in-1 systems modularizes five drivetrain components. Photo courtesy Nissan Motor Co.

Beyond Design

Nissan’s Moss believes that hybrid technology goes beyond design. In fact, it significantly influences the assembly and production process, thanks to advancements in modularization. The automaker recently initiated an assembly process called the “X-in-1” approach, where components are consolidated to streamline production, improve efficiency and reduce costs.

According to Moss, X-in-1 will result in improved performance, reduced weight, smaller size, and better noise and vibration control through integration. Additionally, sharing core components will lead to cost reductions.

“The idea was to modularize core components into one unit to simplify the assembly process,” says Moss. “We achieved a system where, for instance, in e-Power, we combine five components into a single unit.”

hybrid drivetrain module

This hybrid drivetrain module is designed for optimized use of space. Illustration courtesy Schaeffler Group

This integration reduces complexity on the production line, as the five-in-one unit for e-Power eliminates the need for separate motor and generator set ups. This modularity results in a 30 percent size reduction and cuts production costs by simplifying component connections.

“By making it more compact, we also improve unit stiffness, which benefits noise and vibration performance,” explains Moss. “It becomes easier and faster to assemble vehicles, while improving the customer experience with less noise and smoother performance.”

The ability to standardize parts across both EV and hybrid models has allowed Nissan to scale production efficiently, enabling it to meet growing global demand for more sustainable yet versatile vehicles.

“In the next generation of e-Power, we’ll see even more integration, reducing costs further and aligning more closely with the standards of EV technology,” predicts Moss. “The [goal of these advancements is] to help achieve economies of scale that make hybrid technology more accessible and appealing.”