Hybrid, EV, PHEV or FCEV: which is the future fuel?

electric car charging

Toby Hagon

Posted September 01, 2022

As tech innovations gain speed, new fuel solutions are powering the vehicles we drive. So, which is winning the battle of the battery, and which is likely to stay? 

With all the buzz in the media about hybrid cars and electric vehicles, you’d be forgiven for thinking we’ve already entered the age of the Jetsons with flying cars. 

Though the vast majority of cars on our roads are still powered by petrol and diesel today, alternatively-powered vehicle sales are climbing - fast. 

More and more people are giving greater consideration toward what is powering their new car, rather than the amenities that come with it.  

While EVs tend to grab the headlines, there are other power solutions filling the gap between the familiar internal combustion engine (ICE) and the future. 

So, which is the best power tech available today, what are the pros and cons of each, and which is best suited to you? 

Learn how Chargefox is making it easier to transition to an electric vehicle

Hybrid vehicles

Honda and Toyota were the first to combine an electric motor with a petrol engine. Toyota now dominates the market and with some of its models, more than half of its sales are for the hybrid variants.

The appeal is no surprise as costs have dropped. Many hybrids have a price premium of only a few thousand dollars over the non-hybrid alternative. Some are as little as $1,500.

Yet many hybrids will significantly reduce your fuel bills, often by as much as 50 per cent.

For a family travelling 15,000km annually, that could amount to fuel savings of up to $1,500. The payback, then, can be as little as one year, and for most hybrids, you’ll likely get the modest premium back within two or three years.

A hybrid works its fuel-saving wonder with its electric motor, which can create electricity as you’re decelerating through regenerative braking. When you press the brake pedal, the deceleration may be a result of the electric motor reversing its flow rather than brake pads grabbing the discs.

Then when you accelerate, that electricity you captured by slowing down can be used to power an electric motor to assist the petrol engine. It means the regular engine doesn’t have to work as hard.

That also means a hybrid does its best work around town, where there’s lots of stop-start.

At a constant speed on a freeway there are fewer opportunities for regenerative braking, so the fuel savings aren’t as pronounced.

Either way, expect hybrids to be around for a long time yet. They’re relatively affordable, familiar and for most people deliver genuine fuel saving benefits.

Pros: Affordable, can reduce fuel use by up to half.

Cons: They can sometimes run purely on petrol, fuel-saving benefits are not as big on a freeway.


Mitsubishi Eclipse PHEV

Mitsubishi’s Eclipse Cross plug-in hybrid has recieved a warm welcome to the market. 

Plug-in hybrid electric vehicle (PHEV)

PHEVs take the hybrid story further.

Like a regular hybrid, they have an internal combustion engine and a fuel tank. 

They also have an electric motor/s but get a bigger battery pack than a plain old hybrid.

That means they can be recharged externally to travel further on electricity, usually between 40km and 100km.

So, if you want you can run a PHEV almost entirely on electricity.

But there’s a petrol engine there to allow you to take off on the big road trip and treat them the same as you would an internal combustion engine car. Your only constraint is the location of the next service station.

Keep in mind that once the battery pack is depleted, you’ll be running solely on petrol and typically using more of it than a regular hybrid. That’s because that large battery pack is heavier, making the engine work harder.

PHEVs are also less efficient when running in electric mode. That’s because the electric motor has to move an engine and gearbox that are at that moment contributing nothing to the forward motion of the car. They’re a temporary dead weight.

PHEVs can also be expensive, often bringing a $10-20,000 price premium over a similar model without the hybrid bits.

That means the payback in fuel savings could be a decade or more away. 

Keep in mind, too, that they need to be serviced just like a petrol car, even if you’re running yours primarily on electricity.

Throw it all into the mix and it’s no surprise some are predicting plug-in hybrids will be the first of the electrified tech to be phased out.

Sure, PHEVs are playing a role now, but they’re arguably more relevant in Europe, where some cities demand vehicles that are zero-emissions while in the CBD.

PHEV benefits will also be diluted when the EV fast-charging network expands. Even today some EVs can add a few hundred kilometres of range after just 15 minutes of charging. Once those charging stations become more prolific – and future EVs charge even faster – the argument for a PHEV will be further diminished.

Pros: All-electric driving range without the range-anxiety.

Cons: Expensive, compromised as an EV and compromised when running on petrol.


Kia EV6

The Kia EV6 has been one of the most-awarded cars of 2022. 

Electric Vehicles (EV)

Until recently, EVs had been getting more affordable. Over the past few months, prices on most have risen due to a few simple factors, including, demand outweighing supply thanks to the global chip shortage, and supply chain disruptions adding to costs. The rise in prices is now potentially taking them out of reach of some buyers.

But while most EVs aren’t cheap, they pay back during ownership with much lower running costs - something that has crystalised in the shadow of record-high petrol costs.

Whereas a petrol-powered SUV may cost $15-30 in fuel to travel 100 kilometres, an EV typically costs $5-8 to go the same distance. Top up from free public chargers or using home solar and that cost can be reduced to zero.

Electricity prices also have nothing like the volatility of petrol, adding to the peace of mind.

So, while you may pay $10-20K more for an EV, you should be saving around $2000 per year on an average of 15,000km travelled.

Then there are maintenance costs. There’s very little that needs to be done to an EV, with the main service points a check of brakes, ventilation and suspension systems. Over the first five years of ownership, it’s easy to save at least $1000 on servicing.

Add it up and suddenly the price premium is repaid within as little as four or five years, adding to the appeal of EVs.

While prices have crept up in recent months, so have those for petrol models.

Expect the price relativity between petrol/diesel and EVs to close over the coming years, especially as more competition hits the market.

And while fast charging outlets are currently limited, there are thousands more coming.

Pros: Home charging, lower running costs, less complexity.

Cons: Limited fast-charging stations, large battery packs can be bulky and expensive.


electric badge on car

FCEVs are still categorised as electric vehicles. 

Fuel Cell Electric Vehicles (FCEV)

There’s another piece to the future EV puzzle: FCEVs.

They are still EVs and run purely on electricity, but instead of a large battery pack to store energy, they have hydrogen fuel tanks that can feed a fuel cell, which performs a chemical reaction to create electricity. 

An FCEV can be refuelled in about the same time as a petrol-powered car, but it has the benefits of a battery electric vehicle.

The perfect solution then… well, not quite.

Apart from the tech being quite expensive, fuel cells can currently only be refuelled at a handful of locations around Australia. The infrastructure simply isn’t available yet.

So, while fuel cells could provide a viable long-term zero-emission solution, they’re currently not practical for most.

Pros: Refuelling times akin to a petrol car, and less weight.

Cons: The tech is expensive, and there’s very few places to refuel.


The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s)issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.