- The 2026 Hyundai Palisade Hybrid brings the automaker's TMED-II hybrid system to the U.S. for the first time.
- It's the second generation of Hyundai's entirely in-house developed parallel-hybrid system, which boosts efficiency and power.
- TMED-II also brings more EV-like features to hybrids.
While electric vehicles have made undeniable strides over the past decade, hybrids can feel like they are still somewhat in the shadows of the Toyota Prius, which debuted back in the '90s and evolved in cautious, incremental steps. But with hybrid sales surging across the globe, automakers are pushing gas-electric powertrains into high gear.
Hyundai, for one, has gone all-in. Its U.S. lineup already includes hybrid versions of the Santa Fe, Tucson, Sonata and Elantra. Now, the 2026 Palisade joins the pack and it’s debuting Hyundai Motor Group’s second-generation TMED-II hybrid system.
TMED stands for Transmission-Mounted Electric Drive and this revised setup brings meaningful upgrades over the system's first iteration. Compared to the TMED-I system on current Hyundai hybrids, TMED-II on the new Palisade is more powerful, more efficient and gives drivers more control over the hybrid battery’s state of charge, something they couldn’t do before.
The Santa Fe Hybrid, for instance, uses a 1.6-liter turbocharged inline-four engine paired with a 60-horsepower electric motor and a 1.49 kWh lithium-ion battery. Now, this new Palisade Hybrid gets a larger 2.4-liter turbocharged inline-four engine and a 1.65 kWh battery teamed up with two electric motors.
The smaller 17-hp (13 kilowatt) motor helps the vehicle fire up and powers in-vehicle functions. The larger 72-hp (54 kW) motor drives the wheels and aids with regenerative braking. They’re both compact units mounted inside the transmission case, without increasing the size by much, Melvyn Bautista, the product planning manager at Hyundai Motor America told InsideEVs at the New York Auto Show.
The battery has grown modestly. But unlike Toyota’s power-split hybrid system, Hyundai uses a parallel-hybrid layout. (You can dive into the differences between the two here.)
Hyundai estimates the Palisade Hybrid will return 34 miles per gallon, good for a projected driving range of 619 miles. That’s a serious number for a vehicle this size. The hybrid system also makes it more powerful than the V6 Palisade, adding 90 hp for a combined estimated output of 329 hp and up to 339 pound-feet of torque.
There’s also a new Stay Mode accessed via the touchscreen. It allows drivers to run the HVAC, infotainment, radio and other in-car systems without firing up the gas engine. That means you can stay parked—at a trailhead, at a game or a campsite—and still power up the cabin purely on electricity.
Better still, you can prepare for it. Drivers can activate Stay Mode a few miles before reaching their destination. The system will then use the engine and regenerative braking to charge the battery to 70–80% before arriving. Once parked, the vehicle can run its systems on that stored charge without the engine constantly turning on and off, as many hybrids do today while idling.
It could be a useful feature for families. If the kids have soccer practice in the morning and then a game in the afternoon, they might need to kill the time between the sessions in the car, especially if it's freezing or sweltering outside. The Stay Mode will allow them to sit inside, stream shows, blast music, or take a nap, all without turning the engine on for up to two hours.
Future versions of this hybrid system are also expected to get vehicle-to-load (V2L) functionality, which allows powering external appliances using the vehicle’s battery. This is common on modern EVs, but not on hybrids yet.
This T-MED II system is only a glimpse of what’s next for hybrid technology—they are poised to get more energy dense packs, more efficient motors and more EV-like features in time.
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