Corporate Fleet Transition: Hybrid vs Electric Vehicles

Since 1 January 2025, the tax treatment of hybrid vehicles in corporate fleets has become significantly more onerous. The vehicle business-use tax (TVS) now applies to both PHEVs and HEVs, with components based on CO2 emissions and air pollutants. For a PHEV such as the Citroen C5 Aircross (110 g/km CO2), the annual tax reaches approximately €1,320, up from €0 previously. The weight penalty, lowered to a threshold of 1,600 kg with a 200 kg allowance for PHEVs offering more than 50 km of electric range, now affects models like the Ford Kuga PHEV (1,850 kg), triggering a registration penalty of up to €2,500. [1]

The benefit in kind (BIK) follows the same trend. Hybrids made available to employees after 1 February 2025 are taxed at 15% of the purchase price, losing the 70% reduction reserved for EVs (capped at €4,582 per year). For a Toyota Corolla HEV priced at €28,000, the annual BIK reaches €4,200, compared with just €840 for an equivalent EV after the reduction. This increased tax burden raises employees' personal tax bills and employer social contributions, making hybrids less attractive. According to the Arval Mobility Observatory, EVs typically deliver 15–20% lower total cost of ownership (TCO) over three years for a mid-sized services business. [4]

Despite these constraints, hybrids retain genuine advantages. HEVs such as the Honda Jazz (4.5 l/100 km, 102 g/km CO2) do not depend on charging infrastructure, an important benefit for employees in rural areas. PHEVs, with 50–80 km of electric range, reduce fuel costs in urban use. They still need to be plugged in: a PHEV that mostly runs on petrol loses most of that advantage.

The CSRD directive, mandatory from 2025 for large companies and from 2026 for certain mid-sized businesses, requires disclosure of fleet carbon footprints. [2] Hybrids emitting 80–120 g/km CO2 weigh heavily on carbon reports compared with EVs (0 g/km in use). A fleet of 50 Hyundai Tucson PHEVs (115 g/km) generates approximately 6 tonnes of CO2 per year, versus 1 tonne for EVs under average French grid mix. [6] To meet the European Green Deal targets (−55% emissions by 2030), companies must reduce the proportion of hybrids in their fleets.

Low Emission Zones (LEZ), now active in cities such as Strasbourg and Nice, permit hybrids (Crit'Air 1 sticker), but EVs are better positioned as restrictions tighten further. Fines for non-compliant vehicles in active LEZ zones typically range from €68 to €135 per offence depending on the city. The French Mobility Law (LOM) requires 20% low-emission vehicles (EVs, PHEVs, hydrogen) when renewing fleets from 2025, with potential penalties from 2026. [3] PHEVs qualify provided their electric range exceeds 50 km, so they remain viable, though their market share is declining.

HEVs captured a significant share of French fleet registrations in 2024, driven by models such as the Renault Clio E-Tech (94 g/km CO2), while PHEVs declined year-on-year, hampered by predominantly petrol-mode usage in practice. In 2025, HEVs continue to lead fleet registrations, but EVs are gaining ground, boosted by full vehicle tax exemption and a 70% BIK reduction. According to the Arval Mobility Observatory, EV TCO is approximately 15% lower than PHEV TCO over three years, particularly for urban use. [4] A fleet of 50 EVs can save tens of thousands of euros in taxes over three years compared with an equivalent PHEV fleet.

Hybrids appeal through their range (700–800 km for a Corolla HEV) and charging independence, but their weight (e.g. 1,950 kg for a Tucson PHEV) and carbon footprint are clear disadvantages. The choice therefore comes down to usage: an HEV for regular long-distance driving, such as field sales teams, an EV for trips into Low Emission Zones.

Looking to 2035, the EU ban on new internal combustion engine vehicles, which encompasses hybrids (PHEVs and HEVs), signals their gradual phase-out. [7] Manufacturers are already scaling back hybrid offerings; Stellantis, for instance, targets 70% EV sales in Europe by 2030. [8]

Before replacing a hybrid, look at what your vehicles actually consume. With the Greenway card, every fill-up and every charging session is linked to a vehicle and its driver: litres, amount and the mileage entered at the pump. Over a few months, comparing a PHEV's fill-ups with its charging sessions shows whether it runs on electricity or on petrol. Fill-ups also carry a carbon estimate, a starting point for your CSRD reporting.

Fuel and charging go on the same card, tolls on a badge linked to the vehicle, and spending can be exported to your fleet management software (GAC) or your accounting. Greenway does not sell vehicles or pick models for you: the platform gives you the figures, the decision stays yours.