Plug-in Hybrid Car Sales Surge, But Savings May Be Illusory

Sales of plug-in hybrid electric vehicles (PHEVs) have seen a significant rise, with year-to-date figures showing a 41.8% increase and a market share of 13.1%. This surge has been partly fueled by a decision to extend their sales, allowing new petrol and diesel car sales to continue until 2035, effectively offering a reprieve for drivers hesitant to commit to fully electric vehicles. PHEVs are often positioned as a compromise, combining the long-distance capabilities and quick refueling of internal combustion engines with the lower emissions and potential cost savings of electric vehicles.

However, questions are being raised about whether these vehicles truly deliver on their promised financial benefits. A significant concern for PHEV owners is the impending introduction of a pay-per-mile road tax scheme, set to begin in 2028. Under these plans, fully electric cars will be charged 3 pence per mile, while PHEVs will incur a 1.5 pence per mile charge. This charge is in addition to existing fuel duty paid on petrol. For PHEV owners who utilize the electric-only range, this could mean paying road tax on miles driven electrically, while still paying fuel duty on miles driven by the combustion engine, leading to a potential double taxation. This has led some drivers to express anger, feeling 'conned' into purchasing PHEVs based on government assurances of environmental benefits and cost savings.

The technology behind PHEVs has advanced, with improved battery technology, largely driven by manufacturers in China, leading to significantly longer electric-only ranges. Some new PHEVs now offer up to 93 miles of electric-only driving. For example, Chery's Omoda sub-brand offers models with a claimed EV-only range of up to 93 miles, and the Jaecoo 7 SHS-P boasts a 56-mile EV-only range and a combined range of 745 miles. Other manufacturers are also increasing electric ranges; the Seat Leon e-Hybrid, for instance, now offers up to 82 miles of electric-only driving, a substantial increase from its earlier models. Many of these newer PHEVs also support DC fast charging, allowing for quick top-ups of the battery on the go.

Despite these technological advancements, research from the Energy and Climate Intelligence Unit (ECIU) suggests that the cost-saving claims surrounding PHEVs are misleading. ECIU data indicates that real-world emissions from PHEVs are nearly five times higher than official manufacturer tests suggest. This is attributed to drivers not charging their vehicles frequently enough to maximize electric driving, leading to increased reliance on the petrol engine. A survey by CTEK found that one in six PHEV owners never plug in their vehicles, and another 10% do so only once a month. The ECIU estimates that PHEV owners may be spending almost twice as much on fuel as manufacturers indicate, with yearly running costs potentially reaching £1,030 compared to an estimated £540. When factoring in servicing, tax, and insurance, PHEVs can be over £1,000 more expensive annually to own and operate than fully electric vehicles.

Furthermore, the initial purchase price of PHEVs is often higher than their electric counterparts. An ECIU analysis found that eight of the UK's top 10 best-selling PHEVs cost more to buy than equivalent EVs, with an average premium of around 10%. For instance, a VW Tiguan PHEV is reportedly £5,780 more expensive than the VW ID.4 EV. This trend, combined with the potential for higher running costs and the impending pay-per-mile tax, casts doubt on the overall value proposition of plug-in hybrid vehicles for consumers seeking genuine cost savings in their transition towards electrification.