If the family has outgrown a compact SUV then you’ll be looking for something bigger. But if you’re used to the excellent fuel savings that a hybrid can offer then you’re in for a shock: regular hybrids and even plug-ins have become essential to success in the compact SUV segment, but are conspicuous by their absence as you move up the ladder. To date, the Toyota Grand Highlander Hybrid/Hybrid Max and Mazda CX-90 PHEV have been the only spacious mainstream contenders for mid-size buyers seeking three-row practicality and hybrid power. Here’s a quick comparison:
| Specification | Hyundai Palisade Hybrid | Toyota Grand Highlander Hybrid Max | Mazda CX-90 PHEV |
|---|---|---|---|
| Powertrain | 2.5 L Turbo I4 + Dual Electric Motors | 2.4 L Turbo I4 Hybrid MAX | 2.5 L I4 Plug-In Hybrid (17.8 kWh battery) |
| Combined Output | 329 hp | 362 hp | 323 hp |
| Drivetrain | AWD (HTRAC mechanical) | AWD (e-Axle rear) | AWD (i-ACTIV) |
| Fuel Economy (Combined) | 8.1 L/100 km ≈ 29 mpg | 8.7 L/100 km ≈ 27 mpg | 4.2 Le/100 km ≈ 56 MPGe / 26 mi EV range |
| Towing Capacity | 4,000 lb | 5,000 lb | 3,500 lb |
The field widens for the 2026 model year with the arrival of a hybrid variant as part of Hyundai’s all-new, second-generation Palisade lineup. Hyundai says its decision to introduce the hybrid stems from a combination of factors – most notably, a marked increase in consumer demand for fuel-efficient vehicles in the three-row or mid-size SUV segment. It told us, “While other models received hybrid powertrains earlier, Hyundai prioritized developing a more robust system suitable for the Palisade’s size and performance expectations.”
Pricing: 2026 Hyundai Palisade Hybrid
| Model | U.S. Price (USD) | Canadian Price (CAD) |
|---|---|---|
| Preferred Trend | US$47,520 | — |
| Limited | US$51,990 | — |
| Calligraphy | US$56,780 | — |
| Luxury | — | C$60,499 |
| Ultimate Calligraphy | — | C$65,699 |
All prices MSRP |
Under the Skin, the 2026 Palisade Hybrid is All About Power With Purpose
- Engine: 2.5-litre turbocharged inline-four (Theta III)
- Electric Motors: Dual-motor hybrid system (integrated into 6-speed automatic)
- Combined Output: 329 hp
- Transmission: 6-speed automatic with hybrid integration
- Drivetrain: Standard HTRAC AWD (mechanical)
So what has Hyundai built? In April this year, Hyundai revealed its next-generation Hybrid System, which makes its production debut in the 2026 Palisade Hybrid. It’s said to offer up to 45% better fuel efficiency and 19% more power compared with ICE powertrains of the same class, and be applicable to powertrains with an output from the low-100s hp up to 300 hp or more, as here in the 329-hp Palisade.
The system is quiet and refined in operation, delivering its power smoothly. The driving experience is not especially engaging, though.
The setup incorporates a six-speed transmission with two integrated electric motors and an underfloor battery pack. As in the ICE-powered Palisade, AWD is still provided by the mechanical HTRAC AWD system, but Hyundai’s new hybrid toolkit does include a rear e-axle option – similar to the Grand Highlander Hybrid Max – that we can expect to see in a future product.
At the heart of the Palisade Hybrid is a new, Theta III, 2.5-litre turbocharged inline-four engine. Operating with those two electric motors, the combined fuel consumption figure is 8.1L/100 km. For comparison, the gas-only Palisade V6 has a combined consumption of 11.1L/100km, so that’s a 27% fuel saving from switching to the hybrid.
On the Road, It’s All About Refinement Over Thrills
This is not a plug-in hybrid, where you might expect to be running on electric for a lot of the time, so we were surprised when we drove the Palisade Hybrid by how far it would run on electric power, once the battery was charged. The system is quiet and refined in operation, delivering its power smoothly. The driving experience is not especially engaging, though. The steering has no on-centre feel to speak of and if you can bring yourself to sacrifice the bling, smaller wheels than the Ultimate Calligraphy test vehicle’s 21-inch rims will improve the rolling refinement.
But this Hyundai SUV does deliver on the family-SUV essentials: space in all three rows, flexibility in the seating and cargo-carrying configurations, a nicely crafted interior, and the practical touches (chargers, storage) and infotainment options its owners and demanding passengers will want. It’s good to see physical switches retained for the bulk of the essential controls, too, and even the haptic switches work well, although the fan control isn’t easily located when you have your eyes on the road.
It also looks sharp, and with the right powertrain under the hood, we think the new Palisade Hybrid has what it takes to be a hit.
