Forward-thinking businesses like Frito-Lay, Google, Hertz and Staples have embraced plug-in hybrid electric vehicles (PHEVs) for more than a decade, showcasing their commitment to a greener future. This year, PHEV sales in the U.S. surged by 20%, and there are now more than 860,000 PHEVs on the road. Their popularity is fueled by the flexibility that PHEVs provide to drivers, who can use 100% electricity for short trips, and avoid range anxiety during longer journeys when the vehicle switches over to gas.
PHEVs typically cost more than their internal combustion engine (ICE) counterparts. For example, an ICE Chrysler Pacifica touring starts at $37,620, whereas the plug-in hybrid model is $51,095. Some of this difference can be made up in generous federal and state tax credits, but most of the extra cost is recouped over the vehicle's lifetime through lower gas and maintenance costs. However, these savings, as well as the environmental benefits of PHEVs, vanish when fleet drivers fail to charge and become overly reliant on the gasoline engine.
The average American vehicle emits approximately 4.6 metric tons of carbon dioxide, driving 11,500 miles, each year. Fleet drivers who navigate 70 miles daily potentially contribute nearly double those emissions, especially if they operate larger vehicles such as SUVs, minivans, or trucks. PHEVs offer an opportunity to mitigate these emissions effectively in all-electric mode, as they produce zero tailpipe emissions. With a battery range of 30 miles, a daily fleet driver can drive 7,500 miles by charging nightly, and even more if they recharge the electric battery on the go.
However, the same battery technology that makes PHEVs better for the environment overall make the vehicles heavier and correspondingly less fuel efficient when running exclusively on gas. Their heavier bodies also wear out tires more quickly and add more tire particulate to the environment. Finally, PHEVs require more material to manufacture, so their initial environmental footprint is larger. As a result, when not used as intended, PHEVs are actually worse for both the environment and a company’s bottom line than their gas vehicle counterparts.
How much money and CO2 is at stake depends on a number of factors, such as the vehicle make and model, how far it’s driven, the cost of gas, and off-peak electricity rates at an employee’s home. The PHEV fleet cost savings calculator can estimate the specific cost in your situation. In any case, the numbers add up quickly. A business with 50 drivers traveling 7,500 miles a year or more would save $15,600 and cut 73.5 tons of CO2 from the environment each year by requiring those drivers to plug in at home, using the national averages for electric rates and gas.
The savings can be even more significant in areas with high gas prices, like California, or low home utility rates, like Washington and Utah. For example, in Baltimore, where the average gasoline price currently stands at $3.77, and the off-peak residential electricity rate is a mere $0.09 per kilowatt-hour, having employees plug in could save the same company $26,875 a year ― more than $500 per vehicle.
It's important for fleets to take a pro-charging approach. The more a PHEV fleet vehicle is charged, the larger the savings. Best practices should include:
Organizations that fail to implement an active home-first charging policy for their PHEV fleet drivers are missing out. By adopting these strategies, they can encourage employees to use PHEVs as they were intended, while saving money and helping the planet.
Kate L. Harrison is the co-founder of MoveEV, an AI-powered EV transition platform.
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