Posted By

Date Posted

Hybrid vs Electric Cars: What’s Right For Your Fleet? 

Hybrid or electric, which is the right choice for your fleet? Find the perfect fit for your business with the latest insights from Car Benefit Solutions.

With the market in a transition phase, it can be difficult to understand which vehicle types are right for your fleet to fit with you and your employees’ needs for today and how you navigate your journey to an electric vehicle fleet.  

The growing importance of sustainable transportation and cost-efficiency in fleet solutions means running a successful fleet could well be high on the agenda for a lot of businesses now. The Alan Jones Company Car Report 2023 reports that 36% of companies encourage employees to opt for a fully Electric Vehicle or a Hybrid Electric Vehicle, which means adoption has started but there’s still a way to go. Understanding the best way to make the transition is key.  

In this blog you’ll learn about the difference between Hybrid Electric Vehicles and Electric Vehicles, fuel efficiencies and tax benefits for both car types, the environmental impact, and tips on how to make the right choice for your fleet.  

If  you’re a UK-based business looking to electrify your fleet solution, take a look at our Business Fleets page to see how we can help. 

Hybrid vs Electric Vehicles: A Head-to-Head Comparison

There are multiple types of Electric Vehicles – including Plug-in Hybrid Electrics Vehicles or Hybrid Electric Vehicles or Battery Electrics Vehicles – all of which fall under this umbrella term. However, most often when we see or read about Electric Vehicles, it’s in reference to Battery Electrics Vehicles, which operate on electric only.

The other forms of Electric Vehicles, such as Plug-in Hybrid Electrics Vehicles or Hybrid Electric Vehicles run on a combination of electric and traditional fuel.  

Your fleet requirements could influence your electric vehicle fleet. For example, high mileage drivers might be better off in a Hybrid Electrics Vehicle, so they have the back-up of an alternative fuel when they’re travelling long distances. Whereas if you have fleet drivers who mainly use their cars for commuting and personal use and/or you’re sustainability conscious, then a Battery Electrics Vehicle could be the best option.  

With either option though, driving style should also be considered to get the most of the vehicles. To maximise range for Battery Electrics Vehicles and to improve efficiency in electric mode for Hybrid Electrics Vehicle, a steady speed in a high gear (if applicable) should be adopted. Both have the ability to accelerate quickly but this will impact the battery life, as will using any features such as temperature control.

There isn’t a one size fits all, every employee has different needs and the right solution will differ from fleet to fleet, so flexibility is key. 

What is an Electric Car?

A Battery Electric Vehicle runs purely on electricity and needs to be plugged into a charger to charge the car.

What is a Hybrid Car?

A hybrid car, whether it’s a Plug-in Hybrid Electric Vehicle or a Hybrid Electric Vehicle run on a combination of electric and traditional fuel.

Types of Electric and Hybrid Vehicles

There are three main types of Electric Vehicles – Battery Electric Vehicles, Plug-in Hybrid Electric Vehicles and Hybrid Electric Vehicles. Let’s unpick what each of them mean when it comes to choosing the right type of vehicles for your business.   

Battery Electric Vehicles (BEVs) 
Runs purely on electricity and should be plugged into a dedicated home charger. An installed Electric Vehicle home charger is the most time and cost-efficient way to charge the car.   

Most Electric Vehicles are also delivered with a standard three-pin plug that can be used in a domestic plug socket, but most manufacturers advise only using these in emergency situations.   

Planning the journey is essential with a Battery Electric Vehicle, your drivers need to ensure they have enough battery life to get to their destination, or schedule a pit stop to recharge.  

Plug-in Hybrid Electric Vehicles (PHEVs)  
Run on both electricity and fuel – either petrol or diesel. The primary source is electricity, which requires a plug-in charging point to refuel the battery. Again, a home charger is recommended for the best charging results.   

If the battery becomes empty or the vehicle is travelling at speed, the engine with revert to using petrol or diesel.  

Your drivers have more flexibility with a Plug-in Hybrid Electric Vehicle, as they have a back-up source of fuel. However, if they want optimum efficiency, then some planning is required to maximise the electricity consumption.  

Hybrid Electric Vehicles (HEVs)  
These vehicles have the ability to run on either electricity or fuel, but mainly run on petrol or diesel. The electric battery is recharged through regenerative braking, not through a plugging into a charger.   

The choice of energy is down to the driver, with most vehicles allowing the switch between traditional fuel and battery mode at the touch of a button.   

This is a favourable transition option, for businesses wanting to test out an Electric Vehicle, but aren’t yet ready to make the full leap. However, both Hybrid Electric Vehicle and Plug-in Hybrid Electric Vehicle are planned to be phased out of manufacture by 2035.  

Fuel Efficiency and Running Costs 

The debate over the last couple of years about whether Electric Vehicles are more cost efficient to run than traditional fuel types has gone from one side of the fence to the other and back again. When Electric Vehicles were first being introduced to the market, the potential fuel efficiency was clear to see, however, since 2022 when energy prices have significantly increased, the argument is now a little muddier.  

The actual cost of electricity varies hugely from car to car, depends on location and energy supplier and differs from public charging to home charging. However, there’s still potential to make savings on fuel costs.

Fuel efficiency will depend on driving style, road and weather conditions, as well as the size of the battery. Utilising pre-conditioning could also improve efficiency, as drivers can set off with a full battery and their desired temperature inside the car, and the battery at optimum temperature too.

Running costs for Electric Vehicles though is where there’s more clear-cut savings. First year road tax and subsequent years for Battery Electric Vehicles is free until 2025, parking is discounted or free in some locations and they’re not usually subject to any local charges such as clean air zones or congestion zones.  

Similarly for Plug-in Hybrid Electric Vehicles and Hybrid Electric Vehicles, the first-year road tax is lower than petrol or diesel cars, starting from just £10 but does depend on the CO₂ emissions, subsequent years are free until 2025. The parking discounts and not having to pay local charges for clean air zones and congestion zone s also applies for hybrid cars. 

Tax Benefits 

Salary sacrifice schemes can be mutually beneficial for both your business and your employees. It’s an attractive benefit when it comes to Electric Vehicles, as the current Benefit-in-Kind (BiK) rate for EVs is 2% for cars with under 75g/km of CO₂ emissions in accordance with the optional remuneration arrangement (OpRA) established in 2017. The Government has outlined that BiK won’t increase above 5% until after 2028. 

Your employees sacrifice a fixed amount from their gross salary in exchange for a company car and as a result they pay less income tax and NICs and you also pay less Class 1 NICs. You can choose whether your employees simply pay the 2% BiK for their salary sacrifice electric car, or whether they pay more towards the life costs of the vehicle, which can include the cost of the lease to the business, the tax, service and maintenance. 

Environmental Impact 

With the UK Government’s strategy for reaching net zero greenhouse gas (GHG) emissions by 2050 well underway, environmental impact is now a consideration for most businesses. As transport is the largest emitting sector of GHG emissions, producing 26% of the UK’s total emissions in 2021 according to the Transport and Environment Statistics, looking at your car fleet can be a step towards going green. With Electric Vehicles having lower CO₂ emissions, you can build the sustainability of your business.  

Range Anxiety and Charging Infrastructure  

Range anxiety can still be a factor for Electric Vehicle driver, however, more recently it has been replaced with charging anxiety according to Society of Motor Manufacturers and Traders (SMMT) EV Infrastructure Position Paper. Last year, a pledge of £56 million of funding to increase the amount of Electric Vehicle chargepoints across the UK was announced and this is on top off the £1.6 billion already committed to the charging network by the Government.

There’s evidence the Electric Vehicle charging infrastructure is growing, as according toZapMap: ‘At the end of January 2024, there were 55,301 electric vehicle charging points across the UK, across 31,445 charging locations. This represents a 46% increase in the total number of charging devices since January 2023’.  

Performance and Features For Fleets 

When choosing electric fleet vehicles, they do offer several features that can often be overlooked. For example, in some models there’s more space in the front area of the vehicle, due to it being a battery engine over a fuel engine, some such as Tesla even have a front storage compartment.  

Towing is another performance feature of hybrid cars and Electric Vehicles, despite it sometime being reported that these vehicles can’t tow or struggle to. While towing might not be critical for your business, your employees who use their fleet vehicle for personal use may want to tow, so being able to offer this as part of their car benefit is a good retention tool.  

All Electric Vehicles can tow, with the necessary towing equipment of course, and as you would expect of any car, the towing weight will depend on the make and model. When towing, an Electric Vehicle may need charging more regularly, which is something your drivers should keep in mind.  

Making the Right Choice for Your Fleet

When it comes to making the right decision for your business, there are a few things you should consider: 

  • What are your typical driving patterns and how are your fleet vehicles used? 
  • How much mileage do your drivers do daily / weekly? 
  • What type of routes are your fleet vehicles taking?  
  • Is charging availability good in the area you’re based or the area you travel to? 

It’s important to evaluate your budget and long-term cost goals. Review the upfront costs, total cost of ownership (TCO), and potential fuel savings of both hybrids and EVs.  

You should also weigh up the sustainability benefits of EVs against the practical considerations for your fleet. It might be that going fully electric all at once isn’t right for your business currently, but you can still take steps towards your green goal. 

The Future of Fleet Electrification

As we continue the electric journey, the Government and Ofgem are taking steps to deliver affordable, green power, using the Electric Vehicle smart charging action plan. The policy paper details the aims of the plan:  

  • To make smart charging the affordable, convenient choice for consumers. 
  • To provide the right business landscape for electric vehicle smart charging products. 
  • To create an energy system ready for electric vehicle smart charging. 

Electric Vehicle technology is continuing to develop all the time, with so many motor manufacturers already producing electric models. The range of models available is increasing, new manufacturers are starting to enter the UK market, and the entry price point is becoming more affordable with the introduction of the Dacia Spring – all of which is growing momentum towards fleet electrification.  

Ready to Electrify Your Fleet?

The transition to an electric fleet will be different for every company, and it may not be right for your business to go full electric today, but there’s multiple options for electrifying your fleet.  

If you’re looking for help to manage your transition to an electric fleet solution, get in touch with us today.