12 Mar 20

Plug-in hybrids: watch that fuel bill

A plug-in hybrid seems the perfect solution to reduce your carbon footprint without too much effort. If the battery is empty, there is still the combustion engine. However, its biggest asset is also its biggest pitfall.

Everybody knows the success story of the Mitsubishi Outlander PHEV in the Netherlands. The model was a huge hit in Dutch fleets between 2013 and 2016 thanks to the substantial tax benefits granted to plug-in hybrids. In January 2017, the Dutch PHEV bubble burst when the authorities decided plug-in hybrids no longer deserved any fiscal privileges.

The reason was that in practice, people were not using their plug-in hybrid the way it was intended to be used. Urban legend or not, it is said that remarketing companies saw thousands of off-lease Outlanders arriving at their premises with the charging cable still wrapped in its factory plastic. Many corporate PHEV drivers just couldn’t be bothered to use the plug: the fuel was paid by the company anyway and there was no carrot nor a stick to make them charge their car.

Dutch lessons and supercredits

The one thing we can learn from the Dutch PHEV story, is that plug-in hybrids can offer a compelling TCO on paper, but so long as the drivers are not motivated to charge, they can become a TCO nightmare in reality. That’s something to bear in mind when you open up your car policy to this type of powertrain.

Chances are your account manager from VW Group, PSA Group, Volvo Cars, Mercedes-Benz Cars and BMW Group will try and convince you to go for PHEV this year. They have a lot of new plug-in hybrid models coming out – and they will sell them as if their very life depends on it. The European Union takes decarbonisation very seriously: on average, OEMs need to get the CO2 level of all vehicles sold down to 95g/km. The challenge is indeed monstrous in the case of manufacturers selling bigger and heavier cars.

That’s where the so-called supercredits come in. Every car sold that emits less than 50g/km counts double in the calculation of the weighted average of an OEM’s CO2 emissions. 2020 will be a year of close monitoring of sales for the OEMs – and steering them to make sure they don’t miss their target by 2021.

Mastering the fuel bill

Whether the TCO of a PHEV works out in practice depends on the actual fuel consumption – or rather: the lack of fuel being consumed. Based on the WLTP type approval cycle, below-50g/km PHEVs burn between 1.5 and 2 litres of petrol. This number can easily quadruple if the driver never charges the battery and even grow five- or six-fold if he or she mostly cruises at motorway speeds, inflating the fuel bill to more than the one associated with a regular car.

Even in the best-case scenario, with the plug-in hybrid driving on electricity for up to 80% of the time, you mustn’t forget that electric power doesn’t come for free either and that PHEVs are not the most efficient vehicles, neither when they run on fuel, nor when they run on electricity. Even if you disregard the latter aspect, a fully-electric car will always be cheaper to run, unless you only use fast-chargers.

Telematics can help

But how can you keep tabs on the way a PHEV is used and coach your drivers if need be? You could base your analysis on the reports provided by your fuel company and aggregate the data with those coming from the connected wallbox at the drivers’ home, from charging stations at your company’s premises and from the charging card they use at public charging providers.

That sounds complicated, but it could be quite simple if you make use of telematics. Every vehicle can tell you exactly how much fuel it has burnt, how much kWh it has charged at which location and whether or not there is progress to be made. Better still, telematics can help you with the single most cost-saver in the whole PHEV story: by profiling the driver, establishing if they can charge the car daily and cover their commute with the battery alone – and if not, if they had rather consider a different powertrain.


Authored by: Dieter Quartier