Is an EV really the only viable option for company car drivers? Editor-at-large Alex Grant hails recent breakthroughs in the world of plug-in hybrids.

FW editor-at-large Alex Grant

It’s taken more than a decade to get here, but I reckon the plug-in hybrid concept might just have reached fruition. I recently spent a week driving the new Volkswagen Passat eHybrid in entry level ‘Life’ trim and, as all-rounders go, it takes some beating. A spacious estate car with an 81-mile electric range (60-65 in the real world) and zero pretence of sportiness to blunt either efficiency or comfort. Then, within days of handing it back, the Government pulled the rug out from under its biggest target market.

We should perhaps be thankful for some clarity after a decade of political U-turns – last-minute changes to diesel company car tax, a rollercoaster ride for EV BiK and over-hyped delays to phasing out non-hybrid cars and vans in 2030.

The Autumn Budget was a clear statement from Labour that it wants to wean drivers off PHEVs and get them into BEVs.

However, I can’t help wondering if it’s a bit early to clobber them with steep tax rises just as they’re becoming a genuinely useful part of the fleet toolbox.

Consider this: the Passat travels at around 3.0mpkWh of energy in electric mode, which admittedly isn’t that efficient compared to an EV, but the result is enough range for most drivers’ daily needs. Use it as intended and you’ll get EV-like CO2 and cost reductions, less air pollution in town (where it’s most important) and the battery is big enough that you don’t need to plug it in every day – a bugbear of older PHEVs.

This drive cycle then saves the petrol engine for the longer, mostly motorway based, journeys it’s best suited to. I was getting 50-55mpg with the EV range depleted, which is about 11-12p a mile, based on current pump prices. It’s very easy to do long distances in an EV, but much costlier if you’re depending on rapid chargers to do so. At 4.0mpkWh, you’re looking at around 20p a mile on a rapid charger, which is equivalent to around 31mpg in fuel costs. If diligent PHEV usage is your priority, then the Passat can rapid charge from 0 to 80% in around 23 minutes – it’s about time this was the norm.

Tax rises are inevitable, especially for a Chancellor trying to fill a £22bn ‘black hole’ in the country’s finances, but the Budget’s treatment of PHEVs feels a bit heavy-handed with that versatility in mind. From April 2028, vehicles emitting between 1-50g/km CO2 will move into a single 18% company car tax band, regardless of EV range.

Based on today’s prices and spec, a 20% taxpayer in the Passat would get an overnight rise from £51 to £115 at that point. And that’s overlooking the £100 rise in first-year VED rates – and £10 rise in annual renewals – that come into effect from April 2025.

Put your pitchforks down for a minute, because I’m a paid-up member of the EV owners’ club. I’m familiar with the horror stories of early PHEV deployments and I reckon most transport-related Budget policies were sensible this time around.

However, I’d have been a bit more cautious in the Chancellor’s position; still incentivising longer electric ranges but raising the thresholds by 10-20 miles and looking towards PHEV-specific, Advisory Fuel Rates as a nudge towards better driver behaviour. And why not reduce the VAT on public charging?

Ultimately, PHEVs will have a short-term role. The ZEV mandate will limit them to 20% of new car registrations and 30% of vans in 2030, then phase them out completely five years later – and that’s ignoring the lure of cheaper, more versatile EVs. However, net zero is a transition, not an overnight switch – and PHEVs are a step in the right direction. If the goal is cutting CO2 and improving air quality, then I’d be wary about pulling the rug so quickly.