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 how and when vehicles are plugged in 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 compared to a regular petrol or diesel car is considerable, with most vehicles showing a drop of over 60 per cent. The reduction in CO2 emissions, and the corresponding reduction in company car tax, is a key motivation for many.
It’s not only the drivers who benefit. Employers can too. Lower CO2 emissions means lower National Insurance liabilities, and plug-in vehicles are also highly attractive because of their MPG. Indeed, some PHEVs suggest fuel economy figures of up to three times the levels of regular engines, so the positives 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 allow drivers the option of what fuel to use and how to power their vehicle. That choice is not only the attraction but also the potential pitfall with PHEVs.
There is huge concern over the ‘plugging-in’ habits of users. Company car drivers benefit from lower BIK, irrespective of whether the vehicles are actually plugged in to charge and therefore utilising their electric capacity. If the user operates the vehicle largely as a petrol engine, the fuel bill to the business can be much higher than budgeted. When this happens, a PHEV is not a PHEV. It would be pure petrol.
So, when offering PHEVs as part of your fleet the question of fuel needs to be addressed up front, loudly and proudly. Fuel card policy is critical to encouraging the right behaviour. The right motivation needs to be provided so that drivers ensure their vehicles are charged whenever possible. If you’re considering incorporating PHEVs into your fleet, then any employees 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 essentially driving a four wheel drive (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 are often accepted without question. Fuel bills can be a concern, and many companies are paying the consequences of not considering how drivers 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 excluding them altogether - which is not the solution. Companies should encourage low CO2 vehicles and incentivise staff to plug their cars in. For drivers of PHEVs, fuel spend needs to be monitored and charge points must be accessible.
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.
Please contact firstname.lastname@example.org for further information and guidance on fleet policy.