The Hyundai Palisade Hybrid has dethroned the Kia Telluride as Car and Driver ‘s top pick for 2026, marking a major shift in the competitive three-row SUV market. This victory isn’t just about replacing a champion; it signifies a leap forward in hybrid powertrain integration and luxury features at a compelling price point.
A Bold New Design and Luxurious Interior
Hyundai drastically overhauled the Palisade for 2026, borrowing design cues from its Ioniq 9 EV. The result is an aggressively stylish SUV that stands out from the crowd. But it’s the interior that truly impresses, with high-end materials rivaling those found in luxury brands like Range Rover, especially in the top-spec Calligraphy trim. Despite the upscale feel, the Palisade Hybrid remains remarkably affordable, starting under $46,000 and topping out at $60,000.
The cabin offers generous storage space – matching the outgoing Telluride with the third row down – along with plenty of accessible ports and physical buttons. One minor drawback noted by testers is the slightly slower third-row access with motorized second-row captain’s chairs, but this can be easily remedied by opting for the bench seat configuration.
Hybrid Powertrain Delivers Performance and Efficiency
The previous generation Palisade’s sluggish V-6 engine held it back from contention, but the new hybrid powertrain addresses this issue decisively. A turbocharged 2.5-liter four-cylinder is paired with two electric motors integrated into the six-speed automatic transmission, producing a combined 329 horsepower and 339 lb-ft of torque. This setup delivers a 0-60 mph time of just 6.6 seconds, while the all-wheel-drive version achieves an EPA-estimated 30 mpg highway, and the front-wheel-drive variant can reach up to 35 mpg.
Hyundai engineers focused on smoothness, prioritizing electric power at stops to minimize gas engine activation. Electric motor assistance during shifts eliminates torque gaps for seamless acceleration. Although steering feel is somewhat numb and brake pedal effort is light, the ride quality is exceptionally comfortable.
Why This Matters
The Palisade Hybrid’s success is not accidental. It capitalizes on the Telluride’s temporary absence while simultaneously pushing the boundaries of what consumers expect in a family SUV. This win highlights a broader trend: Korean automakers are now challenging established luxury brands in both quality and value.
The Palisade Hybrid is proof that high-end features, strong performance, and excellent fuel economy don’t have to come with a six-figure price tag. Hyundai has delivered a compelling package that redefines the expectations for the modern SUV.
