July 15, 2020
Plug-in hybrid electric vehicles (PHEVs) are a great choice for company cars but only as part of a carefully thought out policy. Managing “plugging-in” these vehicles is vital to ensuring the right outcome for your fleet.
The attraction of low benefit in kind (BIK), low CO2 and high miles per gallon (MPG) has led to a surge in company car drivers choosing plug-in vehicles. The reduction in CO2 when comparing with a regular petrol or diesel car is considerable, with most vehicles showing a drop of over 60%. The drop in CO2 emissions and corresponding reduction in company car tax is a key motivation for many.
It’s not only the drivers but employers can benefit as well. Lower CO2 means lower National Insurance liabilities and plug-in vehicles offer highly attractive MPG. Indeed, some PHEVs suggest fuel economy figures of up to three times the levels of regular engines so the benefits of “plugging-in” are clear.
Although there are a lot of benefits, as a fleet manager you still need to be cautious. It is critical PHEVs are only included as part of a cohesive fleet policy.
PHEVs are unique. No other cars in your fleet could have the option of what fuel to use or how to power the vehicle. However, that choice is not only the attraction but also the potential pitfall with PHEVs.
There is huge concern over the “plugging-in” habits of their users. Company car drivers benefit from lower BIK, irrespective of whether the vehicles are actually plugged in to charge and utilise their electric capacity. In the event that the user operates the vehicle largely as a petrol engine, the fuel bill to the business can be much higher than expected and budgeted for. When this happens, a PHEV is not be a PHEV. It would be pure petrol.
When offering PHEVs as part of your fleet the question of fuel needs to be loudly and proudly. Fuel card policy is critical to encouraging the right behaviour and the right motivation needs to be provided to drivers to ensure vehicles are charged whenever possible. If you’re considering incorporating PHEVs into your fleet, then any employee taking one should be encouraged to have a charge point installed at home.
Sonya Witheridge, Fleet Support at Wessex Fleet explains, “when plugged in, PHEVs are great. They can offer up to 40 miles of electric motoring on zero CO2. However, if not plugged in, you are driving a 4WD petrol car. If an employee suggested a petrol 4WD as their next company car, most fleet managers would laugh, but because PHEVs offer ‘optional plug-in’ they can be accepted without question. Fuel bills are the concern, and many companies are paying the consequences of not considering how you manage a PHEV, before one is delivered.”
The best industry practice remains to integrate Electric and Hybrid vehicles to offer your business and drivers sustainable, tax efficient options. An effective policy shields the business from costs and preserves the environmental benefits these vehicles should bring.
Fleet managers must be aware of the fuel problem before placing orders for PHEVs. Many modern fleet policies encourage the uptake of PHEVs, but others have gone the other way and suggested banning them which is not the solution. Companies need to encourage low CO2 vehicles and staff have to be incentivised to plug cars in. For drivers of PHEVs fuel spend needs to be monitored and charge points need to be accessible for drivers. The good news is that there are many options available to policy makers to incentivise the right behaviour. With the right policy a PHEV is indeed a PHEV.
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