A vehicle includes an engine, a motor generator, a battery, and an ECU, and is configured to selectively perform EV running and engine running. When requested power is smaller than reference power, ECU calculates an engine fuel consumption ratio h1 when the engine outputs power resulting from addition of optimal charging power for the battery to the requested power, and determines whether the engine fuel consumption ratio h1 is larger than an EV criterion line resulting from addition of a margin K to a battery equivalent fuel consumption ratio F. When the engine fuel consumption ratio h1 is larger than the EV criterion line, ECU selects EV running, and otherwise selects engine running. The ECU calculates the margin K by referring to an F−K map which defines correspondence between the battery equivalent fuel consumption ratio F and the margin K with which an SOC is converged to a target range.