The alarm bells are ringing that with Plug-in Hybrid vehicles (PHEVs), we’re pointing in the wrong direction. Taxation is the biggest driver for change, but the problem is that the government aren’t willing to push it.
Shoreham Vehicle Auctions’ (SVA) Managing Director Alex Wright is calling for the government to introduce a new taxation category for electric vehicles (EVs) with small auxiliary engines, arguing it would accelerate the UK’s transition to electrification and address the shortcomings of current PHEVs.
PHEVs were intended to be a stepping stone to electrification, enabling most journeys to be completed on electric power while retaining a small engine for longer trips. But in practice, the evidence is clear that this is not the case.
Wright points to a growing trend in the used market: three-year-old PHEVs arriving at auction with the charging cable still in its original packaging.
“The objective of a PHEV is to maximise electric driving and minimise fossil fuel use,” Wright said. “But in reality, a lot of drivers rarely charge them and use them as a petrol vehicle just to benefit from lower BIK rates. That defeats the purpose.”
This behaviour means PHEVs often burn more fuel than intended, while carrying the dead weight of an unused battery: reducing efficiency and undermining the environmental goal.
Wright argues that a better solution already exists: Range‑Extended Electric Vehicles (REEVs).
REEVs are built around a fully electric drivetrain, with the wheels driven only by an electric motor. A small auxiliary petrol engine acts purely as a generator when the battery is low, not as a power source for the wheels.
Crucially, this auxiliary engine is designed as a true “get‑me‑home” engine, providing just enough output to maintain minimum motorway speeds. Because it cannot power the car in the traditional sense, it naturally encourages electric‑first driving and reinforces the EV‑led behaviour the transition requires.
This architecture provides the full EV experience with a safety net for longer journeys.
A notable example of the concept was the range-extender version of the BMW i3, where a small auxiliary engine acted as a backup generator to allow drivers to reach home or the nearest charging point.
More recently, systems such as the e-POWER technology used in the Nissan Qashqai and X‑Trail have adopted a similar principle, with the wheels driven entirely by an electric motor while the petrol engine acts purely as a generator.
Despite the technology being ready, Wright says manufacturers have little reason to prioritise REEVs.
“Right now, manufacturers are largely forced to choose between building a full EV or a PHEV,” Wright said. “But there’s a very practical middle ground that should be recognised in the UK tax system, an electric vehicle with a small ‘get-you-home’ engine.”
He also highlights that some manufacturers have already shifted strategy based on incentives: “The technology or ‘architecture’ is already ready – look at the new Renault platform, which is designed to accept a range extender,” Wright added. “But without a clear incentive, manufacturers have no reason to build a vehicle solely around this approach. This is evident across the industry – Porsche and Bentley have scrapped pure EVs in favour of PHEVs and extending the life of their ICE technology because tax incentives favour them".
“If the government created a clear tax class for EVs with limited auxiliary engines, it would push manufacturers to design cars where electric driving is the default. Manufacturers follow incentives. The tech is ready, but the policy isn’t.”
From a used market perspective, Wright believes vehicles designed to operate primarily on electricity while retaining limited backup capability would support stronger long‑term demand.
“Cars that work in more real‑world situations always hold their value better,” he said. “If a vehicle can deliver the EV driving experience whilst providing an engine safety net, it naturally appeals to a wider audience.”
Wright argues that creating a new taxation framework for range‑extended EVs would provide a practical stepping stone in the UK’s journey toward full electrification.
“The direction of travel is clearly towards EVs,” he said. “But the transition doesn’t have to be all‑or‑nothing. If we want more people to drive electric, we should support technologies that make that switch easier.”