A plugin hybrid electric vehicle includes an internal combustion engine, a battery, an electric machine, and a controller. The vehicle is operable in a primary electric vehicle driving mode (EV mode) and in a hybrid electric vehicle driving mode (HEV mode). The controller is programmed to receive input from the driver representing a desired operating mode and a desired energy reservation. If the desired operating mode is HEV mode, then a state of charge (SOC) offset is established as the smaller of a maximum SOC offset and an allowable SOC offset, otherwise, the SOC offset is established based on the desired energy reservation. The vehicle is operated based on the SOC offset.