Plug-in hybrid electric vehicles (PHEVs) are hybrid electric vehicles that can draw and store energy from an electric grid to supply propulsive energy for the vehicle. This simple functional change to the conventional hybrid electric vehicle allows a plug-in hybrid to displace petroleum energy with multi-source electrical energy. This has important and generally beneficial impacts on transportation energy sector petroleum consumption, criteria emissions output, and carbon dioxide emissions, as well as on the performance and makeup of the electrical grid. PHEVs are seen as one of the most promising means to improve the near-term sustainability of the transportation and stationary energy sectors. This review presents the basic design considerations for PHEVs including vehicle architecture, energy management systems, drivetrain component function, energy storage tradeoffs and grid connections. The general design characteristics of PHEVs are derived from a summary of recent PHEV design studies and vehicle demonstrations. The sustainability impact of PHEVs is assessed from a review of recent studies and current research and development needs for PHEVs are proposed.