A plug-in hybrid electric vehicle (PHEV) is a vehicle powered by a combination of an internal combustion engine and an electric motor with a battery pack. The battery pack can be charged by plugging the vehicle into the electric grid or from using excess engine power. A PHEV allows for all electric operation for limited distances, while having the operation and range of a conventional hybrid electric vehicle on longer trips. A PHEV design with design parameters electric motor size, engine size, battery capacity, and battery chemistry type, is optimized with minimum cost as a figure of merit. The PHEV is required to meet a fixed set of performance constraints consisting of 0-60 mph acceleration, 50-70 mph acceleration, 0-30 mph acceleration in all electric operation, top speed, grade ability, and all electric range. The optimization is carried out for values of all electric range of 10, 20, and 40 miles. The social and economic impacts of the optimum designs in terms of reduced gasoline consumption and carbon emissions reduction are calculated. Argonne National Laboratorys Powertrain Systems Analysis Toolkit is used to simulate the performance and fuel economy of the PHEV designs. The costs of different PHEV components and the present value of battery replacements over the vehicles life are used to determine the designs drivetrain cost. The resulting optimum PHEVs are designs using lead acid battery type. The optimum design parameter values are all determined by a single controlling performance constraint. The PHEV designs show a 63% to 80% reduction in gasoline consumption and a 53% to 47% reduction in CO2 emissions. The PHEV designs have an annual gas savings of $696 to $643 per year over the average sedan meeting the 27.5 mpg CAFE standards.