This paper presents a new algorithm for modeling spacecraft-plasma interactions: the hybrid grid immersed finite element particle-in-cell (HG-IFE-PIC) algorithm. This algorithm is extended from IFE-PIC and is designed to efficiently and accurately simulate the interactions between nonuniform plasmas and complex objects. In HG-IFE-PIC, the meshes used by the IFE field solver and PIC are decoupled, and the IFE solver uses a Cartesian-tetrahedral mesh that is stretched according to local potential gradient and plasma density. It is shown that the application of HG-IFE-PIC with a stretched IFE mesh can achieve approximately the same accuracy as IFE-PIC while significantly reducing the memory requirement and computation time required for large-scale PIC simulations of spacecraft-plasma interactions.Index Terms-Electric propulsion plume, immersed finite element particle-in-cell (IFE-PIC), spacecraft-plasma interaction.