Currently reading: PHEVs face uncertain future in the UK
UK sales expected to slide following Government’s decision to axe plug-in car grant

History has shown that if you rip out incentives for electric vehicles, then the market dramatically shrinks – so why did the UK Government cut the car grant for plug-in hybrids last month when it claims to want us all to be driving electrified cars in the not-so-distant future? 

The Government argues the purchase grants it introduced in 2011 have lowered the price of around 100,000 plug-in hybrids since and that the market is now “established”. It’s keeping grants for pure electric cars, albeit at a reduced level. 

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Whether the demand is established or not is tricky to define. Yes, the UK is the largest market for plugin hybrid cars in Europe, according to JATO Dynamics, beating even Germany and Norway. In the UK, they also outsell electric cars at the rate of three to one. But at 33,584 sold to the end of September, plug-in hybrids such as the Mitsubishi Outlander PHEV, BMW 330e and Volkswagen Golf GTE still only account for 1.8% of the UK market. 

JATO reckons that’s not established enough and believes sales will plummet. “The only advantage PHEVs have is their incentive,” said global analyst Felipe Munoz. 

Just look at the Netherlands. Our neighbour was the leading market in Europe for plug-in hybrids in 2015 thanks to generous tax incentives for company car drivers. But when the government analysed data from fuel cards, they got a surprise: drivers just weren’t plugging them in. To them, the incentives made the extra fuel drunk just running them as a regular car more than worth it. The incentives quickly shrank and the market collapsed. The Netherlands didn’t even make the top 10 European markets for plug-in hybrids this year.

The Dutch experience was behind our government’s decision, one senior industry figure believes. “We’ve known for some time that some ministers were heavily influenced by the Netherlands report on PHEVs,” they said. Despite lobbying from the car makers to say that, unlike the Dutch, UK drivers were in fact plugging in their cars and thus cutting CO2, the Government removed the £2500 purchase grant. 

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Outlander phev 2015 a 0436 0

The industry is not happy, understandably. Mitsubishi, maker of the UK’s bestselling plug-in hybrid, the Outlander PHEV, called the decision “extremely disappointing” and premature. The car makers’ lobby group said it was “totally at odds” with the Government’s aim to become a world leader in the take-up of ultra-low-emission vehicles. The Society of Motor Manufacturers and Traders cited the Danish precedent, where a government decision to drop incentives in 2017 eviscerated the market for EVs. 

The grant loss came at a time when plug-in hybrid sales were already on the verge of being poleaxed by the switch to the new WLTP emissions testing regime. This came into force in September and was much tougher on plug-in hybrids, meaning cars recorded worse emissions figures and therefore attracted fewer incentives. The response from some manufacturers was simply to remove the car from sale – the VW Passat GTE has only just returned but the Golf GTE isn’t expected back until July 2019. Also dropped were the BMW 330e and several Mercedes

Volkswagen golf gte 1

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Not everyone believes the government got it wrong. “We have to move away from paying people or offering grants to any form of plug-in vehicles. It’s not a long-term solution and plug-in hybrids are the right place to start,” said Greg Archer, director of clean vehicles at pressure group Transport & Environment. Then there’s the delicate issue of the Government being cash-strapped. 

Incentives also distort the second-hand market, which doesn’t see the same tax breaks and buyers therefore aren’t so keen to pay a premium, which harms resale value. 

Given all this, do plug-in hybrids still have a future? Potentially. Company car buyers still pay less tax thanks to the low levels of CO2, and anyone who manages to eke out their commute using electric power alone will avoid fuel duty. Then there’s the need for car firms to sell as many electrified vehicles as possible to reduce their average CO2 targets by 2021 in Europe or face big fines (although whether the UK will count towards those averages once it leaves the EU has yet to be determined). 

There’s also the possibility that, with increased battery sizes, future models will travel more than 70 electric-only miles (as the hybrid-electric London taxi manages) and therefore qualify for the EV purchase grant. 

But as an already expensive car gets more expensive, the future’s not looking good for PHEVs. As Munoz says: “Their biggest attraction is gone.”


Read more

Mitsubishi Outlander PHEV review

Mercedes pulls PHEVs from production to make way for third-gen tech​

Mitsubishi 'extremely disappointed' by end of government plug-in car grants​

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Jan23 26 April 2019

Thanks for nice share.

Thanks for nice share.

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Jan23 24 April 2019

Test result

BertoniBertone 12 November 2018

Good riddance

The several Mitsubishi Outlanders round here are referred to as “Look, another new Mitsubishi Tax-Dodge”. Over-weight, over complicated and from a brand that no one lusts after in West London Yummy Mummy Country - except when it’s a mega fiscal advantage. Thankfully, the government has seen through this for what it is: a dead end. Now , Mitsubishi, how about making something that really helps the planet ? 

Clarkey 12 November 2018

The Outlander PHEV is about

The Outlander PHEV is about the same weight as its rivals - lighter than some versions of the considerably smaller Evoque.  It is a pretty simple car mechanically too.

If fools buy them as a tax dodge and don't plug them in it isn't the fault of the car

FMS 12 November 2018

Clarkey wrote:

Clarkey wrote:

The Outlander PHEV is about the same weight as its rivals - lighter than some versions of the considerably smaller Evoque.  It is a pretty simple car mechanically too.

If fools buy them as a tax dodge and don't plug them in it isn't the fault of the car


That last sentence is a good point well made...but you cannot criticise a fleet car driver for choosing a vehicle that suits their personal work tax position and chooses to put the planet into second place. It would have been the fleet manager who signed off on that car, who could have/should have warned prospective user choosers that a certain mileage %age, would have to be covered under electric power alone...again their choice to make.


Like to think that this scenario was foreseen by the civil servants, who felt that the more pressing positives in enabling these tax advantages, were in the long term ,more important.