This paper evaluates the impact of energy management strategy on the cost benefits of a plug-in hybrid electric vehicle (PHEV) by taking into account the impact of PHEV energy management on battery life and petroleum displacement over the life of the vehicle.Using Battery in the Loop (BIL), a real battery is subjected to transient power demands by a virtual vehicle. The vehicle energy management strategy is varied, resulting in different battery utilization scenarios. Battery life, which varies with battery utilization, is estimated for the different energy management scenarios. The same representative drive cycle is used over the different energy management strategies to isolate the impact of energy management on battery utilization.PHEV gasoline savings, in comparison to a charge sustaining hybrid, are calculated for each of the energy management strategies, for a fixed distance of 40 miles. Comparison of the gasoline dollar savings suggests the optimum energy management strategy considering gasoline saved per day and battery utilization over vehicle life. The analysis is repeated for different driving distances to determine the optimum energy management strategy over different distances.