A few years ago, company car drivers cottoned onto the tax advantages of the hybrid Toyota Prius, with its low CO2 emissions. Then, suddenly, they were everywhere – no longer limited to being the eco-warrior’s favourite mode of transport.
The same happened with double-cab pick-up trucks, as company tax rules classed most pick-ups as commercial vehicles and taxed them at a fixed rate, rather than on their emissions. Manufacturers fanned this flame by offering four-seat pick-up trucks with all the luxuries of a high-spec car.
The latest ‘must-have’ fad among those of us who want to minimise our company car tax bills are plug-in hybrids. By combining a petrol engine with an electric motor, most plug-in hybrids emit less than 75g/km CO2. This means company car drivers pay very little in tax. And for those of us who drive into central London, they’re also congestion charge exempt.
But the burgeoning plug-in hybrid market could soon be killed off, just as the technology starts to go mainstream. In his upcoming autumn statement, chancellor Philip Hammond is expected to announce a benefit-in-kind tax hike for those vehicles that emit less than 75g/km CO2 (i.e. electric cars and plug-in hybrids), meaning it’ll make more sense for most of us to just buy a diesel.
That would be a shame, as the car we’ve driven for this week’s review could instantly be deemed pointless. The Volkswagen Passat GTE combines a 1.4-litre petrol engine with an electric motor to create the fastest Passat currently on sale (hence its ‘GTE’ nomenclature). It’s also, potentially, the best Passat on sale.
The hybrid powertrain results in refinement levels that can’t be reached with conventional diesel combustion engines. Around town, if charge allows, it can be run in electric-only mode for up to 31 miles, creeping up on pedestrians and not emitting a gram of carbon dioxide from its tailpipe. It’s a relaxing way of exploring the City – especially with the adaptive suspension flicked into ‘Comfort’ mode.
The interior adds to the upmarket, refined feel. It might lack an Audi badge, but the Passat GTE is very close to the VW Group’s premium brand in terms of perceived quality. There’s plenty of kit, including a 6.5-inch touchscreen infotainment system and a panoramic sunroof, while swish blue lighting contributes to a high-end feel.
Head out of town on open roads, press the ‘GTE’ button and the car’s character changes entirely. It’s fast: hitting 62mph in 7.4 seconds, although both the BMW 330e and Mercedes-Benz C350e are quicker.
The downsides? Those batteries are heavy, meaning it’s not the nimblest of handlers. The traction control light flickers away if you’re heavy with the throttle, especially in the wet, and the battery cells also eat into luggage space. If practicality is important, buy an estate.
And then there’s the standard proviso with plug-in hybrids: run out of electricity, and it turns into a heavy car powered by a petrol engine. If longer journeys without stopping to charge are your thing, you won’t get near its official 166mpg figure. You might get 40mpg, if you’re lucky.
Would we enjoy driving a Passat GTE around central London? Absolutely. Does it make financial sense? Starting at £36,750 for private buyers (before the Government’s £2,500 plug-in car grant), it’s going to be hard to justify, especially as you can pick up a high-spec diesel BMW 3 Series for similar money. Ultimately, it could be Volkswagen counting the cost if Hammond changes the tax rules for company car drivers next week.