Buying guide
Plug-in hybrids: still worth it in Iceland's climate?
PHEVs lost their tax sweet spot, but they still solve a real problem for long-distance Icelandic drivers.
Plug-in hybrids had a brief golden age in Iceland between 2018 and 2022. The tax breaks were generous, BEV range anxiety was real, and the cars sold quickly. Today, with much better BEVs on the market, the question is fair: is a PHEV still the right buy in 2026?
The case for
- You regularly drive Reykjavík to Akureyri (or further) in deep winter. A modern PHEV does the daily commute on electrons and the long haul on petrol without a single charging stop.
- No charger at home (yet). You can plug into a normal Schuko socket overnight and still meaningfully cut petrol use.
- Tow a trailer. PHEV powertrains often have better towing capacity than equivalent BEVs at the same price.
The case against
- Tax treatment is harsher than 2022. Some PHEVs are now within striking distance of a BEV on total cost.
- Real-world electric-only range is short. A 60 km WLTP rating becomes ~35 km at -5°C with the heater running.
Best buys in 2026
- Kia Sorento PHEV — three-row practicality, strong towing
- Volvo XC60 Recharge — quiet, premium, decent EV range
- Toyota RAV4 PHEV — reliable, efficient, holds value well