When Alfa Romeo is one of the only other manufacturers in your neck of the woods offering a plug-in hybrid SUV, you know it's probably time to enter the fray.

And VW is about to go hard.

New-generation plug-in hybrid powertrains are spreading across the Group, including the Volkswagen Tiguan and Tayron, plus the Škoda Kodiaq and Superb. VW itself now claims well over 100km of electric range from its latest Tiguan and Tayron eHybrids.

The Group has dabbled here before, including with VZe versions of the CUPRA Formentor and Leon. But we've now had our first proper taste of this newer generation of bigger-battery PHEV in the CUPRA Terramar VZe.

And when it comes with the option to sound like a V8, things are looking promising.

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What is it?

The Terramar sits above the Formentor in CUPRA's SUV range and shares plenty underneath with the Volkswagen Tiguan.

Except, thankfully, the styling. 

Its Spanish roots are obvious - and yes, we checked the VIN, it really is built in Spain. If the VW turned up in a crisply pressed business suit, the CUPRA would be wearing flowing linen. And considerably more jewellery, mostly in the form of copper accents.

The VZe sits at the top of the Terramar range at $77,990 before on-roads, pairing a 1.5-litre turbo four-cylinder petrol engine with an electric motor and six-speed dual-clutch gearbox, all driving the front wheels. Together they produce 200kW and 400Nm, while the battery gives it a claimed electric range of more than 100km. 

In the real world? Starting from Sydney, I managed to get almost to Pheasants Nest before the petrol engine was required. Once it was, consumption hovered around 7L/100km for the rest of my week.

The wheels are a work of art on their own.

What's it like to live with?

It's easy to pick the VW influence, and not always in a good way. The buttons for the air-conditioning and volume also work like a touchscreen, which means adjusting either takes much longer than if they were just normal click-y buttons.

But as much as it probably pained the Germans, the Spanish appear to have been let loose elsewhere. The shapes and textures are far more interesting, even if some don't feel quite as expensive as they look. I particularly like the way the CUPRA logo is worked into the sports seats. The touchscreen is similarly adventurous. Finding things can take a while, although perhaps it makes more sense after several Tinto de Veranos.

Thankfully, one thing is refreshingly simple: the speed-limit warning can be switched off and actually stays off until you turn it back on. I wish every modern car did this.

The driving experience is very VW, too, and that's a compliment. There's tight body control, light but solid steering and a ride that's firm without becoming uncomfortable. Of the PHEVs I've driven recently - and it pains me to say it, even including the Alfa Romeo Tonale - this is probably the most engaging. 

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With the punch from the turbo petrol, and the "CUPRA" drive mode which sharpens everything up, you could be in a taller Golf GTI. Except with a V8. 

The noise is almost entirely artificial, piped through the speakers, but it's entertaining enough that I found myself selecting CUPRA mode considerably more often than necessary.

There are flaws. With both bits of the powertrain connected to the front wheels, there is an uncomfortable amount of torque steer. Plant your foot and you have to hold onto the wheel to keep the CUPRA from wriggling.

The brakes aren't particularly reassuring either, initially feeling hollow before biting with all the subtlety of someone flicking a switch marked "BRAKE NOW".

It's also noisier than expected at highway speeds, although the Sennheiser stereo does a reasonable job of covering this up.

Engaging "CUPRA" mode.

The verdict

I just called it better to drive than an Alfa Romeo, so we're either dealing with a very poor Alfa or a very good Volkswagen in Spanish clothing.

The biggest question is one of space.

A regular Tiguan offers 652 litres of boot capacity, while the battery-equipped Terramar VZe manages 400 litres. And if you don't need an SUV, CUPRA's Leon Sportstourer VZe uses the same basic drivetrain, starts at $69,990 and offers 470 litres.

So the Terramar isn't the obvious practical, or even financially prudent, choice.

But with useful electric range, decent fuel economy, and best of all, handling that doesn't make you wish you'd bought something without a charging port, it's a promising preview of where the VW Group's latest PHEVs are heading.

With only a couple of tweaks, it looks look there'll be a lot fun. Especially with some jalapenos thrown in the pot.

Better looking than a Tiguan.