3 oct 17

Plug-in hybrids drive up fleet fuel bills

New research has revealed a massive discrepancy between the actual and official fuel consumption of plug-in hybrid company cars.

The study, by fuel management specialist TMC, is based on real world data from fleet fuel cards. It found that plug-in hybrid vehicles (PHEVs), which combine rechargeable battery power with an internal combustion engine, are among the highest-polluting company cars in terms of greenhouse gas emissions. Their average carbon dioxide output is 168g/km in day-to-day fleet use, more than three times higher than their advertised emissions, which average 55g/km.

Advertised consumption figures
In terms of fuel consumption, the seven makes of PHEV measured in the study averaged 6.3 litres per 100km (45mpg), compared to an average advertised consumption of 2.2l/100km (130mpg).

Thirteen countries within the European Union offer some sort of financial incentive to the owners of hybrid vehicles, including grants towards their purchase, reduced company car tax, and lower annual road tax. But plans have been announced in some countries, including the UK and Belgium, to link any tax relief to the number of miles that a PHEV or hybrid can drive purely on battery power.

Paul Hollick, managing director of TMC, said, “There is a real risk that fleet managers are adopting a PHEV strategy for completely the right reasons but unknowingly actually increasing their fuel bills. It is vital that a fleet deploys a mixed fuel strategy, using real world data.”

TMC data on the performance of 20,000 conventional fleet diesel cars found their actual emissions averaged 159g/km.

Daily recharging is necessary
“Deploying PHEVs is not at all a straightforward decision for fleets,” added Paul Hollick. “Managers need to allow for the fact that their fuel cost per mile can increase substantially on longer journeys. PHEVs can be a cost-effective choice where drivers cover only moderate mileages; but only if the cars’ batteries are recharged daily. On the evidence of our sample, one has to question whether some PHEVs ever see a charging cable. In a lot of cases, we see PHEVs never being charged, doing longer drives and this is not a good fit for a lot of business car users. A robust PHEV deployment policy is essential.”

Sales of PHEVs have soared recently, up 17% to 117,999 registrations across the European Union in 2016, compared to 2015. This momentum has continued into 2017, with year to date figures up 30% in the first seven months of this year at 77,233 sales. The Mitsubishi Outlander dominates the PHEV sector, accounting for a 13.9% market share across Europe this year, followed by the Mercedes-Benz GLC350e and Volkswagen Passat GTE.

A spokesman for Mitsubishi UK said the company’s dealers had been trained to assess the most appropriate power train for their individual customers. “If the customer is doing motorway journeys every day, the PHEV is not designed for that, and the dealer would advise the purchase of the diesel model instead,” she said.

The TMC data also showed how standard hybrid cars (with no plug-in facility) not only outperform PHEVs by nearly 10% in day-to-day journeys, but also emit about 10g/km less of CO2 than diesel cars.

Toyota and Lexus dominate the hybrid market, with 14 models across the two brands and total sales in excess of 1.5 million cars across Europe.

“European fleet operators clearly want to reduce emissions whilst also managing issues like taxation and residual values,” said Dave Cussell, general manager, fleet and leasing division of Toyota Motor Europe. He added that Toyota had seen a substantial increase in the number of fleet operators seeking advice and reassurance about powertrain choices.

“There remains considerable confusion about the various types of hybrid technology on offer, and it is our job to ensure our fleet customers choose the right powertrain for the right job. Plug-in hybrid is a viable option when charged regularly. But, as we know, failure to charge PHEV means that the potential benefits are not realised,” he said.

Real world cost
At TMC, Paul Hollick said the long-term future of hybrids and PHEVs will depend on the strength of their total cost of operation in the real world.

“Our data sample, though small and therefore not definitive, clearly suggests that PHEVs as a class may struggle to maintain their appeal on a real world basis,” he said.

“As hybrids lose their special tax status and conventional vehicles – especially diesels – face increasing air quality penalties, it will become harder for fleet users to identify cars sitting in the ‘sweet spot’ on running costs, range, taxation and emissions.

“Mobility managers will need access to more-complex data models, with comprehensive information on real-world fuel costs and emissions, to identify the best company car contenders in future.”

Authored by: Jonathan Manning