The environmental impact of plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV) is examined in this study by conducting full life cycle assessments (LCA) of both types of vehicles. A Tesla Model 3 BEV and a Ford Escape PHEV are selected for the assessment. The LCAs account for the carbon dioxide (CO2) emissions from material extraction, material transportation, material processing, component manufacturing, vehicle assembly, vehicle transportation to showrooms, vehicle operation, vehicle disposal and recycling. A city drive-cycle, a highway drive-cycle, and a combined drive-cycle are considered for vehicle operation. The CO2 emissions are estimated through the life cycle assessment study to understand the true cradle-to-grave environmental impact of transitioning from PHEV to BEV. The results are compared assuming different sources of electricity for charging the battery during operation: solar, wind, natural gas, and coal. It is shown that the source of electricity and the drive cycles have a significant impact on the conclusions. For example, considering 300,000 km of operation and 30% recovered regenerative braking energy, the CO2 emissions for operation of the PHEV is about 20% higher than that of the BEV for city driving. The 20% difference is attributed to differences in vehicle weight and drag coefficient. This conclusion is independent of the source of electricity. In the case of highway driving, however, the differences vary dramatically based on the source of electricity. When the source of electricity is solar, the PHEV CO2 emissions are about a factor of 7 greater for operation, but when the source of electricity is coal, the CO2 emissions are greater by only about 20%. This life cycle assessment study shows that the PHEV can emit between approximately 5,600 to 62,400 kg of CO2 emissions, whereas the BEV can emit between 9,700 to 57,000 kg of CO2 emissions. This suggests that the impact of increasing electrification of vehicles on the environment is dependent on the part of the country where these vehicles are used and their modes of operation. Maximum benefits from electrification of vehicles can only be realized when the source of electricity is renewables.