How to choose the ideal tax-friendly powertrains without compromise.
Fleet managers and company car drivers have never had a wider choice of powertrains. Hybrids and EVs have moved from the fringes into the mainstream, and are now very attractive, tax-friendly options for business use.
The trouble is, how do you choose between self-charging hybrids, plug-in hybrids, and pure EVs? Which powertrains suit which drivers?
The secret of making a smart choice, according to Chris Chandler, principal consultant of Lex Autolease (pictured right), is to think first about the usage and the user. “The key thing is to find the right vehicle for the right application. You have to look at the drive cycle. Is it mostly rural, is it urban or is it blend?” says Chandler.
As a rule, hybrids are well suited to urban driving with frequent stopping and starting to help recharge their batteries. “Hybrids need to have variations in speed for the systems to maximise energy recapture. And you need to look at things like journey length per day when you introduce plug-in hybrids and pure electric vehicles.
“The other factor to look at is charging potential, at home, at the workplace and on route. It’s probably more necessary for plug-in hybrids than pure electrics, which is counter to what most people think. But if you have a fairly high-range pure-electric vehicle you may only need home charging and occasional on-route charging for really long journeys.”
Although a plug-in hybrid can be driven indefinitely without recharging, so long as the fuel tank is topped up, to do so ignores the running cost benefits of the electric powertrain. “With a plug-in hybrid that has a real-world electric range of 10-30 miles, you’ve really got to look at charging that vehicle at every opportunity to maximise the electric mileage and minimise the use of petrol or diesel,” Chandler advises.
SHORT JOURNEYS, LONG-TERM BENEFITS
It’s this potential for high running costs that makes it particularly important that plug-in hybrids are matched to the right user, and that user is given every opportunity to make best use of the hybrid technology. The driver benefits from low benefit-in-kind taxation, but fuel bills for the employer could be high if the car isn’t recharged or is frequently used for high-mileage journeys.
Last year, fuel management specialist The Miles Consultancy analysed the real-world efficiency of thousands of company-run PHEVs and found average economy was just 39.3mpg. “That’s 90mpg less than the average advertised consumption and significantly worse than the average company diesel,” says Paul Hollick, managing director of The Miles Consultancy (pictured right). “Businesses need to ensure they have a robust strategy when adopting PHEVs to make sure they are fit for purpose.”
For Chandler, that means not only matching the PHEV to the right kind of user but encouraging behaviours that get the best from the technology. “You can use telematics to monitor people and ensure they are driving in electric mode, but I favour a slightly more simplistic method. Firstly, you make sure the individual’s drive cycle is suitable for a PHEV. Secondly, you make sure your fuel policy is set up to drive the right behaviours from employees.
“We’ve had some customers who offer employees free fuel for private use. If someone then takes a PHEV, why would they charge it up? If you give them a fixed pence-per-mile rate instead then they know that if they don’t plug-in their car their personal fuel bill will be higher.”
One of the advantages of a pure electric vehicle is that the cost benefits aren’t so dependent on driver behaviour – the end user has no choice but to charge the battery. And with the average range of an EV improving fast, they’re now suitable for a wide range of users.
“We are seeing pure electric cars that can achieve 250 miles plus in normal driving conditions, not just under WLTP. You can do 250 miles on a single charge and then get another 150 miles from a rapid charger – how many people do 400 miles a day with only one comfort break? These cars tick the box for pretty much every business driver,” says Chandler.
However, limited supply means it simply isn’t practical for every fleet to switch entirely to pure EVs. “Not everybody can go over to pure electric vehicles. We don’t have the battery manufacturing capacity globally. And whether justified or not, some drivers have anxieties about the range of electric vehicles. So I think there’s definitely still a place for hybrids and plug-in hybrids in the short term.”
Plenty for decision-makers to think about, then. “It’s not really that complicated,” says Chandler. “But it is a new way of thinking for fleet managers and drivers.”