Abstract The performance of Plug-in Hybrid Electric Vehicle (PHEV) depends on the energy management strategy (EMS). An optimal EMS guarantees the maximum use of the energy through electric power grid, coordinates power output of main power sources and exerts comprehensive advantages of both engine and motor. However, the current EMS cannot react to the dynamic driving cycles in the future and thus have a bad real-time performance. In order to solve these problems, a novel EMS based on rule-based energy strategy (RE), dynamic programming algorithm (DP) and equivalent fuel consumption algorithm (ECMS) is proposed. First, DP is used to extract the boundary of mode switching and shift schedule under three typical driving cycles in offline, especially, RE is corrected using the boundary of mode switching. Second, an instantaneous optimization strategy-ECMS is used to replace the Charge-Depleting Mode (CD) of RE for finding the real-time optimal solution in a wider range in online, in this part, owe to the fixed distance of urban public transport, a reference State of Charge (SOC) is formulated, and the Proportion-Integration (PI) algorithm is used to make the actual SOC always follow the reference SOC by adjusting the equivalent factor. Finally, combine all the above efforts, a real-time optimization EMS is proposed and validated through simulation and experiment. The results show that this approach can significantly enhance the vehicle drivability, with overall obvious improvement of the comprehensive performance qualification based on both fuel economy and drivability.