Insight: Do hybrids offer the best of both worlds?

Hybrids are fleet operator’s top choice when it comes to alternative-fuel vehicles.

One of the main advantages they have over full-electric vehicles is that there is no need to worry about running out of charge, as hybrids combine a conventional engine with an electric motor.

They don’t suffer from a lack of infrastructure, which is currently holding back other alternatives such as hydrogen and CNG.

Also, hybrids are more widely available than other types of alternative-fuel vehicles (although they still lag far behind standard diesel and petrol vehicles in terms of available models).

Honda and Toyota are already well-established in the hybrid market but in the past 18 months Peugeot, Citroën, Vauxhall, Volkswagen, Audi, BMW, Mercedes-Benz, Infiniti, Porsche, Chevrolet and Mitsubishi have introduced hybrids.

Arguably, the London congestion charge has had a big part to play in the popularity of hybrids. Fleets operating in London, such the Salvation Army, introduced hybrids to the choice list as they were exempt from the charge under the alternative fuel discount.

Last year Transport for London replaced the alternative fuel discount with the greener fuel discount.

Under the new rules, only vehicles that emit less than, or equal to, 100g/km of CO2 and meet Euro5 emissions standards qualify for a 100% discount.

This means that not all hybrids now qualify – take the Honda Jazz with emission of 104g/km as an example – but many still do, especially the latest models.

There are plenty of other financial reasons to consider hybrids.

They typically fall into the lower company car tax bands due to their low CO2 emissions and there are capital allowance benefits for hybrids that emit less than 110g/km of CO2, although this will reduce to cars emitting 95g/km or lower from April 2013.

Diesel hybrids are exempt from the 3% benefit-in-kind (BIK) tax surcharge that applies to standard diesels.

However, future tax changes are hampering hybrid sales in some cases. Vauxhall says that sales of the Ampera have been “steady” but “slightly lower than expected” due to the Government’s decision to deteriorate the BIK incentive in 2015 (within ownership period).

The Ampera and other cars with CO2 of 75g/km or lower will witness a BIK tax shift from 5% of P11D to 9% in 2015, while pure EVs will go from zero BIK tax to 9%.

One of the main advantages hybrids have is that they allow a company to demonstrate it has strong environmental credentials as they emit less NOx and particulate matter than diesels, and some run in EV mode at lower speeds with no exhast emissions.