The 2027 Hyundai Palisade Hybrid has earned recognition for its advanced propulsion system, which combines electric and gasoline technologies to deliver strong performance alongside exceptional fuel efficiency. The award-winning powertrain addresses growing consumer demand for affordable, efficient vehicles amid rising gas prices and reduced incentives for battery-electric models. The system earned a 2026 Wards 10 Best Engines & Propulsion Systems award for its ability to balance power and economy in a three-row SUV designed for families and towing needs. This is especially important to buyers of midsize 3-row SUVs that seat seven or eight passengers and occasionally tow things.
Hybrid Powertrain Design and Efficiency
Hyundai engineers developed the hybrid system with three core objectives: improving efficiency, reducing emissions, and enhancing power. The foundation is a new 2.5-liter turbocharged inline-4 engine modified for hybrid use. It operates on the Atkinson cycle and features an increased compression ratio from 10.5:1 to 12.0:1, optimizing airflow and thermal efficiency. Accessory components like the alternator and air-conditioning compressor are now electric, managed by motors rather than the engine directly. The engine alone produces 258 horsepower and 260 lb-ft of torque.
Two electric motors integrate with a 6-speed automatic transmission to deliver seamless power. One motor handles primary drive while the second functions as a generator, recapturing energy during braking and deceleration. The electric motors contribute up to 72 horsepower and 195 lb-ft of torque, resulting in a combined output of 329 horsepower and 339 lb-ft of torque, surpassing the V-6’s 287 hp and 260 lb-ft. A 1.65-kWh lithium-ion battery pack and 6-speed automatic transmission also play key roles in the hybrid’s performance. The 6-speed automatic provides a traditional feel during merges and passes, avoiding the rubber-band sensation of CVTs while ensuring smooth transitions between electric and combustion power.
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Performance and Driving Experience
Jurors praised the Palisade Hybrid’s refined operation. Robin Warner noted the engine cycling between 2,600 and 0 rpm on the highway, with the electric motor handling most work, yet the cabin remained quiet and smooth. Bob Gritzinger highlighted the tachometer frequently dropping to zero rpm at freeway speeds, indicating strong fuel economy. The system’s “torque filling” capability eliminates turbo lag, delivering immediate acceleration.
Gritzinger called it a “smooth, refined powertrain” with seamless engine restarts that are both inaudible and instantaneous. The hybrid’s efficiency is further validated by Warner’s 26.3 mpg average over 121 miles, even with aggressive driving. Gary Vasilash attributed this success to treating the powertrain as a holistic system rather than optimizing individual components, noting that the efficiency engineered into this system is exceedingly impressive.
Award Recognition and Trade-offs
It offers a compelling alternative to the V-6, with superior power, fuel economy, and a quieter ride. However, the V-6 maintains a 5,000-pound towing capacity, while the hybrid is limited to 4,000 pounds. This trade-off reflects the balance between efficiency and utility, a common consideration in hybrid SUV development. Two electric motors work in concert with gasoline engine, ensuring the system’s seamless integration and responsiveness under varying driving conditions.