Hybrid petrol, plug-in or electric vehicle? How to choose

Mild hybrids

Mild hybrids combine a petrol engine with a small electric motor and 48v battery. They don’t plug-in, because they don’t have a plug – the battery recharges itself via regenerative braking (explained here).

While it’s technically possible to drive some mild hybrids on batteries alone – they wouldn’t get very far very fast.

Instead, the battery and motor are used to make stop-starts smoother – giving a little more power and refined performance on acceleration while boosting fuel economy, squeezing more kilometres out of every tank.

Because they are essentially combustion engine cars with a bit of extra tech, mild hybrids come with a lower price tag than their plug-in equivalents. For drivers with limited access to charging infrastructure, or those that regularly do long trips in more remote and rural areas, mild hybrids can be a good choice.

The downsides are running costs are significantly higher than plug-in hybrids and pure electric vehicles – both in terms of fuel and more regular servicing. Tailpipe emissions are also higher.

Mild hybrids also do not qualify for tax breaks that currently extend to plug-in hybrids and pure electric vehicles – which for company car drivers using novated leases can effectively save drivers thousands of dollars a year.

Plug-in hybrids (PHEVs)

Plug-in hybrids use a bigger battery and motor alongside a petrol engine, which means they can be driven in pure electric mode for considerable distances before switching to fossil fuel. In other words, they are electric vehicles with a back-up plan.

Some of Volvo’s latest PHEVs can travel up to 90km* in electric mode. Even Volvo’s biggest, heaviest PHEV, the XC90 Recharge, has a battery range of circa 77km* – around double the average daily driving distance in Australia.

That electric range means much greater fuel economy, and much lower tailpipe emissions. (For example, 40 grams of CO2 per kilometre for the XC90 Recharge versus 185g/km for the XC90 mild hybrid, and 1.8l of fuel consumption per 100km for the XC90 Recharge versus 8.1l/100km for the mild hybrid*.)

Over the last three years, Volvo Cars’ data for its longer-range PHEVs shows that around half of the miles they travelled were in pure electric mode, slashing fuel costs for their owners, as well as their emissions.

While PHEVs do need to be charged regularly to run in electric mode, electricity works out much cheaper per kilometre than petrol, especially if charged at home off peak. For those able to charge via solar power, there are further substantial savings.

Because PHEV batteries are smaller than their pure-electric equivalents, they can also be fully charged in as little as three hours with Volvo’s new 6.4kW 2-phase onboard charger**, or easily overnight via a standard 220v household connector. That means it’s straightforward to keep the PHEV battery topped-up to get maximum clean miles and fuel economy.

Meanwhile, for long journeys, or towing heavy loads, PHEVs can offer versatility and reassurance.

Plug-in hybrids do come with a higher price tag than mild hybrid equivalents – because owners are paying for a bigger battery, motor and EV hardware as well as an internal combustion engine. That means PHEVs are also heavier, which naturally reduces fuel efficiency when the battery isn’t being used.

But the balance of petrol and electric appears to be convincing more Australian motorists. In the first nine months of 2024, sales of new plug-in hybrid electric vehicles increased by 120.5 per cent to 15,546 units. That’s still only around a quarter of the volume of pure electric vehicle sales, but makes PHEVs the fastest growing segment of 2024 to date.

Tax breaks

The spike in popularity may be related to salary sacrificing tax benefits available for PHEV drivers until 1 April 2025.

PHEVs and EVs are exempt from Fringe Benefits Tax provided their driveaway cost is lower than $91,387. That means under a novated lease scheme, company car drivers can bundle the car, running costs, including insurance and servicing, and have it taken out of their salary pre-tax.

That approach can save thousands of dollars a year – and it’s one of the reasons many car companies have reported a huge increase in sales via novated lease agreements in recent years.

As of April next year, the exemption will only apply to pure battery electric vehicles, or BEVs, which may lead to a dip in PHEV sales and an increase in fully electric vehicles.

But for those that sign a novated lease, usually a three-year agreement, before 1 April 2025, the PHEV exemption applies for the duration of that contract (see ATO’s guidance here).

Battery electric vehicles (BEVs)

Pure battery electric vehicles, or BEVs, mean no more trips to the petrol station – and no more tailpipe emissions.

They use a large battery and motor to power the car – which means they are quieter.

Because of the way electric motors work, they don’t use a gearbox or clutch. Along with instant torque, that means BEVs are considerably more responsive than their petrol equivalents.

For example, the twin motor Volvo EX30 covers the 0-100kmh benchmark in 3.6 seconds*. That kind of performance is perhaps one of the main reasons car enthusiasts are more than twice as likely to own an EV than non-enthusiasts, according to a recent report from NRMA.

BEVs are far more efficient than fossil fuelled cars – because they don’t have to convert petrol into power, so much less energy is lost.

Fewer components also means longer service intervals – and reduced costs. BEV drivers will never need a new exhaust, because there isn’t one. Likewise no starter motor, no radiator, no fuel injection system, spark plugs, coil packs, no head gasket. Transport for New South Wales calculates maintenance costs average out around 40 per cent cheaper than fossil fuelled counterparts.

BEVs also qualify for Fringe Benefit Tax exemptions – and unlike PHEVs, will continue to be exempt beyond April 2025. So company car drivers with a novated lease can save thousands of dollars a year via pre-tax salary sacrificing.

Range increasing

While range anxiety and access to charging infrastructure are often cited as key reasons for Australians not to buy an electric vehicle, Volvo Cars’ latest models, such as the EX30, are capable of up to 450km-plus, while the Volvo EX90 is able to cover up to 570km on a single charge.

However, for people regularly driving long distances, especially further away from capital cities where charging infrastructure rollouts are more developed, pure EVs may still prove less attractive than a mild hybrid or PHEV. NRMA’s latest report suggests that is currently the case.

The report, based on a recent survey of EV drivers and non-EV drivers, finds higher pure electric vehicle uptake among families with children, those in capital cities and those with annual household incomes over $200,000. Among those drivers, sustainability and lower running costs were the biggest considerations in buying an EV.

Battery electric vehicle uptake was markedly lower outside of capital cities and among Baby Boomers.

Either way, as Volvo Cars global CEO Jim Rowan recently put it, “choosing an electric or a hybrid should never be a compromise”. It’s just a question of circumstance.

To make a more informed choice, visit volvocars.com/au, or speak with your local retailer.

*The figures are preliminary and derived from estimates and calculations performed by Volvo Cars which is not carried out on every individual vehicle sold by Volvo and these outcomes are not guaranteed. The real-life driving range and energy consumption achieved under real conditions varies depending on factors including but not limited to driving style, road and traffic conditions, environmental influences, vehicle condition and accessories fitted, means in the real world the range you experience can differ from that advertised. Advertised figures are meant for comparison purposes. Vehicle certification pending.

** To benefit from the shorter charging times our new onboard charger can provide, you need to charge with a 3-phase charger. The charging time is preliminary and derived from estimates and calculations performed by Volvo Cars and these outcomes are not guaranteed. Please also note that charging times can vary and are dependent on factors such as outdoor temperature, current battery temperature, charging equipment, battery condition and car condition. Vehicle certification pending.