An analytic method of demand torque was designed for a plug in hybrid electric vehicle equipped with continuously variable transmission (CVT), which is based on the external characteristic curve of the power source and the signal from the driver's operation. Then, energy management strategy minimizing instantaneous economic cost under drive and brake condition was proposed, with the demand torque, vehicle speed and state of charge (SOC) of battery as the state variables, and the throttle opening of the engine, motor torque and speed ratio of CVT as the control variables. Further research was carried out on the influence of whether the engine driving alone is allowed at the charge depleting stage on economic cost. Through simulation with self built forward model, the results have shown that the strategy that does not allow engine driving alone at the charge depleting stage is better in comprehensive economy.