For years, plug-in hybrids were sold as the perfect compromise, with a heavy emphasis on that last word. A little electric driving to get you through a day’s commute, plenty of gasoline backup for longer trips, and in many countries some major tax advantages. But in China, that formula is suddenly looking outdated, and some of Europe’s biggest luxury brands are retreating with their tailpipes between their wheels.

 

China’s latest taxation rules have raised the bar for plug-in hybrids, rewarding models that can travel much farther on electricity alone with more lenient bills. Previously PHEVs only need to achieve 27 miles (43 km) to qualify for discounts, Automotive News reports. From January of this year that threshold was upped to 62 miles (100 km). If you’ve been wondering why so many Chinese PHEVs now have a better electric range than EVs from a few years back, there’s your answer.