Steady growth for the Plug-in Hybrid Electric Vehicle (PHEV) market

Steady growth for the Plug-in Hybrid Electric Vehicle (PHEV) market

21 December 2020 | A Merrick | 7 min read

Increased demand for plug-in hybrid electric vehicles in 2020

The Plug-in Hybrid Electric Vehicle (PHEV) market is growing steadily, and growth is expected to continue into the new year. Better technologies, consumer demand, and low-emission targets motivate manufacturers to develop new, sophisticated plug-in hybrid models. These vehicles are being used more for both personal uses and commercially around the UK. Especially in London, where more on-street electric charge points have been installed (the target was to deliver an additional 1,500 this year). Further electric vehicle infrastructure is being put in place to reduce harmful CO2 emissions in the capital. We've seen it first hand, with more customers interested in Renault Kangoo ZE van leasing, Nissan e-NV200 electric lease or PHEV vehicle leasing over the last year.

What are plug-in hybrid electric vehicles (PHEVs)?

PHEVs combine a petrol or diesel engine with an electric motor, enabling the driver to run the vehicle on pure electric for some time and offset some of their mileage on the battery. PHEVs can expect a range of between 20-40 miles on the battery alone, where the driver will also save money on fuel. These vehicles run further than a pure-electric van or car as they are supported by the petrol/diesel engine. This means that they are not zero-emission motor vehicles (but are capable of zero-emissions). Nonetheless, they are more environmentally friendly than a car or van running off petrol or diesel alone and have cost-saving benefits. Including fuel economy, making them a desired choice for many drivers in 2020.

A rise in registered plug-in hybrid electric vehicles.

By the end of autumn 2020, there were over 370,000 plug-ins on UK roads, including PHEVs. By September 2020, PHEVs saw an incredible increase in sales, rising 139%, while petrol and diesel sales declined. However, it should be noted that the motor vehicle market as a whole has seen a decline over the year. Primarily due to the impacts of Coronavirus and factory closures during an unprecedented period. As the nation lived through a lockdown in April, there were only 95 new PHEV vehicles registered in the UK. However, as demand grew in the months to follow, those investing in new cars were inclined to go for an electric or hybrid one. As a result, there were over 7,700 plug-in hybrid cars registered in the UK in November 2020.

This suggests several findings, including the rise of the environmental conscience consumer, the manufacturer's push on sales and marketing of these vehicles, and encouragement from the government to work towards low emission target plans in the UK. For example, the government offers grants and incentives for users to pursue an electric vehicle. Not to mention zero emission-capable vehicles are often eligible for a 100% discount on the Congestion Charge in London.

According to the Society of Motor Manufacturers and Traders (SMMT), PHEV registrations accounted for 1.5% of the market share in September 2019, which more than doubled to 3.8% by September 2020. The figures from the month prior, August 2019/2020, tell a similar story with an increase of 222%. In August last year, there were 977 PHEV vehicle registrations, yet in August 2020, this rose to 2,922 registrations.

Manufacturers are also driving the trend, with popular and familiar ranges now available in a PHEV version. 

The classic Ford Transit Custom (one of the best selling vans in the UK) is now available as a plug-in hybrid. The exterior design is as Ford Transit Custom as possible, with no significant bells or whistles boasting its electric capabilities. This allows the 2020 Ford Transit Custom PHEV to blend in with its traditional counterparts on the road. However, the diesel engine is replaced with 1.0-litre petrol and electric battery pack and motor, making this van run more quietly and smoothly on the road. Here at Commercial Vehicle Contracts, we have access to competitive Ford Transit Custom deals. So if you're interested in the modern PHEV version of this successful van, then get in touch for a free quote.

2020 Ford Transit Custom Plug In Hybrid

Additionally, Volkswagen has flourished in the electric vehicle market, with its Golf GTE being a successful sale this year. It revealed its first-generation Golf in 1974, and it was, and still is, a hit within the automobile world. So it's no wonder that this consistently top-selling car is now available in a sophisticated plug-in hybrid electric. When driving on the pure-electric motor, the 2020 Golf GTE plug-in hybrid ranges up to 30 miles. The driver can then rely on the 1.4l petrol engine until they can plug the car into a charging point. The Golf GTE can be charged to total capacity in under 2 and a half hours using a public charger. The development of the Golf GTE was a wise choice for Volkswagen. It provides an opportunity for customers to dip their toes into the world of battery-powered vehicles before committing to go full-electric.

2020 Golf GTE plug-in hybrid electric car

So, the growth of the PHEV market is expected to continue in 2021, primarily as consumers and businesses want to become more familiar with electric plug-ins. There is increased pressure from the government encouraging drivers to switch to electric, with PHEVs often being seen as a compromisable middle ground between a petrol/diesel engine and a pure electric vehicle. The sale of new petrol and diesel vans and cars are due to be banned by 2030 under new government guidance, with hybrid vehicles given an extra 5 years saving grace. The ban on the sale of hybrids is set to take effect by 2035. However, there is a broad discussion of plug-in hybrids to still be sold if they can travel a 'significant distance' emitting zero emissions. Therefore, we're likely to continue to see PHEVs take a more significant portion of the market share than before. And with affordable business contract hire and finance lease offers, driving an electric vehicle isn't as unattainable as it once may have seemed.

Ready to switch to electric or hybrid? Check out our electric van leasing deals and get in touch for more information on your new lease.

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