Hybrid electric vehicle

Know Your EV: The Pros and Cons of Plug-in Hybrids

  Plug-in hybrids can be a useful stepping stone for drivers looking to go electric, but only if they’re deployed and used correctly. Here’s how to unlock the full potential of hybrid technology.

Plug in hybrids

Plug-in hybrids are already a familiar technology with UK fleets, but it’s not always been a straightforward relationship. Bolstered by tax incentives and freedom from electric vehicle ‘range anxiety’, there were 193,000 on UK roads at the end of 2020 [1], and an ever-wider choice of new models means demand is continuing to grow.

However, they’re not always a direct alternative to petrol or diesel, and differences in usage can have a significant impact on running costs.

What is a plug-in hybrid?

Plug-in hybrids feature a mains-rechargeable battery, which typically provides an electric range of 25-30 miles. Once that range is depleted, they work similarly to a full hybrid (such as a Toyota Prius), using a combination of combustion engine and electric motor assistance to maximise fuel efficiency. As a transition technology en route to decarbonising transport, the UK Government has hinted that plug-in hybrids won’t be included in the 2030 ban on sales of new petrol and diesel cars [2].

The potential advantages of plug-in hybrids include:

  • Smooth, quiet, electric driving and zero tailpipe emissions in cities
  • Reduced fuel bills and carbon emissions for fleets
  • Refuelled with petrol or diesel on longer journeys – no reliance on public charging
  • Familiarising drivers with charging routines and their daily mileage

However, plug-in hybrids also have downsides:

  • Unlike an electric car, they still have a combustion engine to service and maintain
  • Boot space, seating and fuel tank capacity are often reduced compared to a petrol or diesel version
  • Charging rates are usually a lot slower than a fully electric car
  • Cost savings rely on regular charging

How fuel efficient is a plug-in hybrid?

Driver behaviour has a big effect on plug-in hybrid fuel efficiency, and published data is somewhat arbitrary. High-mileage drivers who rarely if ever plug in will struggle to come anywhere near the official figures. Equally, those who charge regularly and drive mostly within the vehicle’s electric range could achieve higher efficiency than the brochure suggests.

Emissions Analytics claims 37.2mpg fuel economy for plug-in hybrids once the electric range is used up, as an aggregated figure from its on-road testing [3].

Using this as a baseline, the following table illustrates how a higher share of electric driving impacts average efficiency.

Electric Driving Share Fuel Efficiency
0% in EV mode 37.2mpg
25% in EV mode 49.6mpg
50% in EV mode 74.4mpg
75% in EV mode 148.8mpg

These savings add up. If all of the UK’s PHEVs were driven on battery power for half of their country’s average annual mileage [4], it would reduce tailpipe CO2 emissions [5] by 130,760 tonnes compared to not charging at all. That’s equivalent to the annual CO2 output of 83,000 petrol cars [6].

What does a plug-in hybrid cost to run?

Average fuel economy is only part of the picture. Most drivers will plug in at home, and the electricity used isn’t free, so cost per mile calculations need to include the energy used to charge the battery.

Based on a UK-wide average of 17.4p/kWh in 2020 [7], a PHEV will cost around £2 to fully charge. Costs per mile depend on usage, as shown below.

Vehicle Type EV Efficiency **  (MPkWh) ICE efficiency (MPG) Cost per mile
Diesel * N/A 53.4 11p
Petrol * N/A 44.6 13p
PHEV (0% EV mode) 2.5 37.2 15p
PHEV (25% EV mode) 2.5 37.2 13p
PHEV (50% EV mode) 2.5 37.2 11p
PHEV (75% EV mode) 2.5 37.2 9p
PHEV (100% EV mode) 2.5 37.2 7p

* Based on AFRs for mid-size petrol and diesel vehicles (WLTP -15%) [8]

** MPkWh figure is based on typical 30-mile range and 12kWh (usable) battery capacity

In this example, fuel and electricity costs for the plug-in hybrid would be less than an equivalent diesel for any journey where 50% of the distance can be carried out on battery power. It would also have the advantage of driving the final few miles without any tailpipe emissions.

How do you encourage plug-in hybrid drivers to charge?

There are several simple steps to control plug-in hybrid running costs:

1. Ensure drivers can charge at home

The Office for Zero Emission Vehicles (OZEV) provides a 75% grant (up to £350) to support home chargepoint installations, and this is available to plug-in hybrid drivers. Click here to find out more.

2. Set a specific mileage rate

HMRC recommends that hybrids are treated as petrol or diesel cars when reimbursing for fuel expenses [8] and many of them will attract the highest mileage rates (22p/mile for petrol, 16p/mile for diesel) as a result. Setting a lower mileage allowance for plug-in hybrids, recognising the reduced cost of driving on electricity, could encourage drivers to plug in more often.

3. Use off-peak tariffs

Plug-in hybrids typically take two or three hours to charge, and can be topped up when energy is cheapest. The UK average for off-peak energy was 10p/kWh in 2020 [7], which can make a significant difference to running costs.

4. Check the charging cable

Chargepoints have a standardised connector, compatible with plug-in hybrid and electric vehicles. However, some plug-in hybrids are only supplied with a three-pin plug, which can make it less convenient to top up while on the road.

What are the tax benefits for plug-in hybrids?

The UK Government has steadily wound down incentives for plug-in hybrids during the last few years. However, the following still applies:

Vehicle Excise Duty

A £10 First Year Rate applies for vehicles with CO2 emissions between 1g/km and 50g/km, and all hybrids are eligible for the reduced £145 rate from the second year. However, a £310 annual supplement applies for the first five years where the list price (including options, delivery, inspection and VAT, but registration fees and the First Year Rate) is £40,000 or more, regardless of CO2 emissions [9].

Capital Allowances

Businesses can write off 18% of the purchase cost or 100% of rental or lease payments against pre-tax profits where vehicles emit 50g/km or less CO2 [10].

Company car tax (CCT)

Company car tax for low-emission vehicles includes incentives for models with the longest electric range [11]. Some comparisons are shown below.


2021-22 Benefit-in-Kind



2022-23 Benefit-in-Kind


  Fuel P11d CO2
EV Range Rate 20% 40% Rate 20% 40%
Kia Niro PHEV ‘3’ PHEV  £       32,140.00 31 30 11%  £          58.92  £        117.85 12%  £          64.28  £        128.56
Kia Niro Hybrid ‘3’ Hybrid  £       27,130.00 119 0 20%  £          90.43  £        180.87 20%  £          90.43  £        180.87
Volkswagen Golf GTE PHEV  £       35,995.00 26 40 7%  £          41.99  £          83.99 8%  £          47.99  £          95.99
Volkswagen Golf GTD Diesel  £       32,570.00 137 0 31%  £        168.28  £        336.56 32%  £        173.71  £        347.41
Volvo XC40 T4 Recharge R-Design PHEV  £       39,390.00 47 28 13%  £          85.35  £        170.69 14%  £          91.91  £        183.82
Volvo XC40 B4 Auto R-Design Petrol  £       34,970.00 165 0 37%  £        215.65  £        431.30 37%  £        215.65  £        431.30
Skoda Superb iV SE Tech Estate PHEV  £       35,845.00 31 37 11%  £          65.72  £        131.43 12%  £          71.69  £        143.38
Skoda Superb 2.0 TDI SE Tech 150PS Estate Diesel  £       30,145.00 132 0 30%  £        150.73  £        301.45 31%  £        155.75  £        311.50
BMW X5 xDrive45e M Sport PHEV  £       69,860.00 27 54.7 7%  £          81.50  £        163.01 8%  £          93.15  £        186.29
BMW X5 xDrive30d M Sport Diesel  £       63,295.00 175 0 37%  £        390.32  £        780.64 37%  £        390.32  £        780.64


Tax incentives for low-emission fleets are outlined in our Essential Guide to Fleet Funding and Taxation, which is available here.




[1] Service.gov.uk. (2021). VEH0133: Licensed ultra low emission vehicles by body type and propulsion or fuel type: United Kingdom [online] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/985632/veh0133.ods [Accessed 24 May 2021].


‌[2] Department for Transport (2020). Government takes historic step towards net-zero with end of sale of new petrol and diesel cars by 2030. [online] Available at: https://www.gov.uk/government/news/government-takes-historic-step-towards-net-zero-with-end-of-sale-of-new-petrol-and-diesel-cars-by-2030 [Accessed 24 May 2021].

[3] Emissions Analytics. (2019). Plug-In Hybrids Without Behavioural Compliance Risk Failure. [online] Available at: https://www.emissionsanalytics.com/news/2020/1/8/plug-in-hybrids-without-behavioural-compliance-risk-failure [Accessed 24 May 2021].


[4] Service.gov.uk. (2021). NTS0901: Annual mileage of cars by ownership and trip purpose: England, since 2002 [online] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/906055/nts0901.ods [Accessed 24 May 2021].


[5] Anon. (2019). Calculation of CO2 emissions. [online] Available at: https://people.exeter.ac.uk/TWDavies/energy_conversion/Calculation%20of%20CO2%20emissions%20from%20fuels.htm [Accessed 24 May 2021].


[6] Service.gov.uk. (2021). ENV0103: Average new car fuel consumption: Great Britain [online] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/944686/env0103.ods [Accessed 24 May 2021].

[7] Service.gov.uk. (2021). Average unit costs and fixed costs for electricity for UK regions (QEP 2.2.4) [online] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/973052/table_224.xlsx [Accessed 24 May 2021].

[8] GOV.UK. (n.d.). Advisory fuel rates. [online] Available at: https://www.gov.uk/guidance/advisory-fuel-rates [Accessed 24 Nov 2021].


[9] GOV.UK (2021). Vehicle tax rates. [online] Available at: https://www.gov.uk/vehicle-tax-rate-tables [Accessed 24 May 2021].

[10] HMRC. (n.d.). Claim capital allowances. [online] Available at: https://www.gov.uk/capital-allowances/business-cars [Accessed 24 May 2021].

[11] GOV.UK. (n.d.). Tax on company benefits. [online] Available at: https://www.gov.uk/tax-company-benefits/tax-on-company-cars [Accessed 24 May 2021].


[updated 25.11.21]


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