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. *Greenway* helps companies compare costs, showing that 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. *Greenway* analyses usage profiles to recommend the right hybrids: for example, a delivery company equipping 30% of its fleet with the Renault Captur E-Tech PHEV may achieve significant savings on fuel costs by optimising electric-mode driving.

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. *Greenway* provides audits to support this shift, for example by helping a retail chain switch to HEVs with lower emissions to reduce its carbon footprint.

✓ Compliant / Favoured ⚠ Partial / Transitional ✗ Non-compliant

Based on CSRD (EU 2022/2464), LOM, and LEZ municipal regulations

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. *Greenway* helps companies balance their fleets: for instance, equipping 20% of a mid-sized company's vehicles with PHEVs to comply with LOM while limiting tax exposure.

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. *Greenway* optimises vehicle choices based on usage: HEVs for long-distance travel (e.g. field sales teams) and EVs for Low Emission Zone areas. A consultancy equipping 40% of its fleet with EVs may achieve significant TCO savings compared with equivalent PHEVs, particularly in urban settings with access to charging infrastructure.

2024

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] *Greenway* anticipates this transition by integrating refurbished EVs for SMEs or PHEVs for immediate needs, for example a delivery fleet adopting EVs and achieving fuel cost savings per vehicle.

*Greenway* is a strategic asset for companies in 2025 as they navigate the tax and regulatory complexity of hybrid fleets. The platform evaluates PHEV and HEV suppliers based on their eco-score, CSRD compliance, and TCO, recommending models such as the Renault Arkana E-Tech (105 g/km). Integrated with ERP systems, it generates carbon reports, as demonstrated for a logistics company that reduced its carbon footprint by switching to HEVs. *Greenway* also monitors upcoming tax changes, such as a potential removal of PHEV allowances in 2027.

For PHEVs, *Greenway* maximises electric usage by sourcing green charging infrastructure. A supermarket chain increased its PHEV charging rate by 35%, saving 8% on fuel costs through solar-powered charging points. For SMEs, the platform sources second-hand hybrids that comply with both Low Emission Zones and the French Mobility Law (LOM). These solutions reduce costs while laying the groundwork for full electrification.

PHEV

*Greenway* also strengthens HR attractiveness. With growing employee preference for eco-friendly vehicles, hybrids remain a selling point, but EVs are increasingly preferred. A services company attracted new talent by offering 25% of its fleet as Peugeot 3008 PHEVs, while planning to reach 50% EVs by 2027 with *Greenway*. By combining tax efficiency, sustainability, and employer brand, the platform transforms hybrid fleets into a transitional lever on the road to an all-electric future.