by Robby DeGraff, Manager of Product and Consumer Insights
Consumers are hungry for hybrids these days; that’s not a secret, especially those eyeing up the Hyundai brand for their next vehicle, as our AutoPacific data shows. Nearly 60% future Hyundai buyers who told us in our 2025 Future Attribute Demand Study (FADS) that they're planning to acquire a three-row XSUV/SUV...would consider one with hybridization. As we've seen with other automakers, like Toyota and Lexus, it pays to have a strong hybridized player in this segment.
What made my trip last week in Texas to briefly drive the Hyundai’s new 2026 Palisade Hybrid was that it was actually my first time ever driving the latest redesigned Palisade. All in all, Hyundai (again) knocked it out of the park, transforming its popular three-row family hauler into an even better and more appealing product. Offering one in this format that returns upwards of 34 mpg in the right spec without any compromises is a big money-making win. The practicality is still there (thanks to the battery pack being mounted behind the front passenger’s seat and not in the cargo area), the upscale driving experience is still there, and the performance is better.
Being a design nerd, I could probably write a novel about how much I'm obsessed with the design of the latest Palisade, inside and out (like its bold chrome D-pillar motif and the Calligraphy trim's leather and faux-wood covered scalloped dashboard that curves around to meet the doorcards). It appears much classier, it's bigger than the prior generation Palisade, and the lounge-like interior is truly a very comfortable, spacious, and relaxing place to be, whether in treacherous bumper-to-bumper Austin rush hour traffic or lost amidst the Texas hillside country.
Down to the nuts and bolts: The new hybrid system, Hyundai Motor Group's TMED-II, affixes two electric motors to the Palisade's six-speed automatic, making it more powerful, quicker, and premium to drive. The battery pack isn't plopped below the cargo floor, sacrificing usability; rather, it's cleanly tucked away ahead of the second row passenger's side bucket seat. It's possible to travel 500+ miles on a full tank, the transition between gas and electric is seamless and smooth, plus Hyundai told me a buyer would hypothetically make up the ~$2k upcharge for the hybridized powertrain in 1.5 years. Steering was responsive, with "Sport" mode firming up your grip in the wheel, and while we only embarked down a few dirt roads, the now-electrified AWD footprint is said to be a bit more capable. I'm excited to see this TMED-II proliferate across other Hyundai models and into other HMG brands.
My biggest complaint (and as of now only complaint) was where they put the gear selector: a stalk mounted precariously low on the steering wheel. My right knee was constantly striking it while driving, which was really disappointing. Tall adults, including my 6’2” self, beware.
Overall, standing ovation here, Hyundai. I look forward to spending a full, thorough week testing and seeing what kind of real-world mileage I can get out of the new Paliasde Hybrid.