Car manufacturers are accused of misleading drivers about the cost saving benefits of plug-in hybrid vehicles (PHEVs) with a think tank calling it 'a scandal with echoes of dieselgate'.

The Energy and Climate Intelligence Unit (ECIU), an electric vehicle-backing research organisation, said owners of PHEVs are 'likely spending almost twice as much money to fuel their cars than their manufacturers have led them to believe'.

These cars have a petrol engine and supplementary battery and electric motors to drive the wheels.

It said that while motorists are told their annual fuel and electricity bills per annum for the most popular PHEVs sold in Britain will amount to around £530, the reality is they will be coughing up £985 a year.

This is because 'petrol is more expensive per mile than electricity' and PHEV owners typically don't charge their cars regularly enough to make the most of the electric benefits, it claimed.

Industry figures show that just over 225,000 PHEVs were bought by Britons last year, which was a 35 per cent year-on-year increase in registrations - the biggest growth of any fuel type, even battery electric vehicles.

While PHEVs have long been considered a 'stepping stone' from traditional internal combustion cars to fully electric models, Colin Walker, transport analyst at the ECIU, said the motor industry has been pushing their sales to 'keep the nation's driving bills high'.

Walker's comparison to the 2015 diesel emissions cheating scandal, which has seen Volkswagen pay out almost £28billions in fines and compensation to customers since, has irked the car sector's trade body.

A spokesman for the Society of Motor Manufacturers and Traders told the Daily Mail and This is Money that car firms 'don't make 'claims' about fuel efficiency' and are 'by law required to test all vehicles to the same repeatable, government-verified standard'.

The ECIU said buyers of the 'top-selling PHEVs' are likely spending £450 a year more than they would have expected based on the claims made by manufacturers.

Citing calculations by Brussels-based green think tank Transport & Environment, it said PHEVs consume 490 per cent more fuel than the manufacturers' official figures published online and in sales brochures state.

However, this is partly because T&E estimations are based on PHEV owners rarely charging their cars, meaning they rely on the petrol - or diesel - engine most of the time, which ultimately results in more frequent visits to filling stations.

ECIU says the disparity between claimed and 'real-world' fuelling costs means a PHEV typically works out more expensive to own than an equivalent petrol - and far pricier than an EV.

The total costs of ownership (including purchase price, fuel bills, insurance, tax and servicing), it said, is £81 a year more than a regular petrol car. 

And, when compared to the ultra-low cost of charging an EV at home, PHEVs are 'almost £1,000' more to own a year, the report claimed.

However, its calculation does not consider the significant impact of electric car depreciation on total running costs, with EVs plummeting in value far quicker than PHEVs - and every other fuel type - due to an oversupply that's outpacing demand in the second-hand market. 

As such, poor residual values make EVs far less financially viable to buy than the think tank has suggested.

It also failed to acknowledge that EVs - like petrol, diesel and conventional 'self-charging' hybrid cars - are subject to the same European-standard test cycle as PHEVs to determine how fuel/electricity efficient they are.

While this provides miles per gallon (mpg) figures for motors with combustion engines, it are also provides official ranges that manufacturers quote for EVs.

And, like mpg, it is typically difficult for drivers to replicate these figures during real-world driving.

Recent on the road tests have found that the claimed range of EVs can plummet by up to 40 per cent during winter conditions - and nearly halve when driving in extremely hot weather experienced in some parts of the continent. 

As such, owners will be paying a lot more for electricity than the official range figures published by car makers present with official figures. 

Despite this, the ECIU says the UK Government's recent decision to allow leniencies in electric car sales targets - the Zero Emission Vehicle (ZEV) mandate - to include hybrid registrations towards their sales quotas to evade fines for missing EV tarrgets is a mistake and a sign that it is allowing auto makers to dictate the direction of the market.

Walker said: 'This increasingly looks like a scandal with echoes of 'dieselgate'. 

'The industry's successful lobbying of government will encourage the sale of hybrids and keep the nation's driving bills high. 

'Expanding the pool of hybrids on the road will leave the second-hand market, where most of us buy our cars, awash with vehicles that are much more expensive to run and own than EVs. 

'Some families will be left simply unable to make the switch to cheaper and cleaner electric driving.'

He added: 'Drivers already pay a 'petrol premium' of hundreds, even thousands, of pounds year to run a petrol car rather than an EV, but it's clear the premium to drive a plug-in hybrid is almost as high.'

A spokesman for the SMMT responded to the ECIU's report, telling us: 'Manufacturers don't make 'claims' about fuel efficiency. By law, they are required to test all vehicles to the same repeatable, government-verified standard – the WLTP Test – and by law they must publish the results in all advertising. 

'Industry works with international regulators to evolve the WLTP test as more data becomes available.

'With some still concerned about the availability and cost of public charging, manufacturers have developed a range of technologies so everyone can reduce their emissions. 

'Plug-in hybrids can be a crucial stepping stone to going fully electric, allowing people to experience the benefits of zero emission driving and helping to overcome anxiety.'

Despite the concerns of eco-facing campaign groups, PHEV sales are accelerating faster than any other fuel type in Britain.

The 225,143 examples entering the road last year was a third higher than in 2024 - and more than double the number of diesel car registrations.

Sales grew 34.7 per cent, which was ahead of the EV curve, which saw a 23.9 per cent increase in registrations in 2025.

One of the big factors behind last year's rise in PHEV demand was the arrival of new Chinese brands, many of which have launched a number of plug-in hybrids with incredible petrol-electric ranges.

BYD's Seal U DM-i - which starts from £33,340 - was the nation's most-bought PHEV last year. In December alone, one in eight PHEV and EV registrations were cars built by this Chinese brand.

EVs and PHEVs stung by pay-per-mile tax from 2028

Both EV and PHEV owners in the UK from 2028 will be forced to pay an additional pay-per-mile tax under new measures announced by the Chancellor in November's Autumn Budget.

Rachel Reeves confirmed e-VED will arrive in just two years' time, with fully electric car owners charged 3p for every mile they cover to compensate for the Treasury's loss in traditional fuel duties from petrol and diesel cars.

And PHEV owners will be charged 1.5p per mile. The Chancellor said the reduced charge 'strikes the right balance' when taking into account the cars' 'capacity to drive in either electric or petrol mode'.

Owners have raged that it will be a double tax sting, with PHEV drivers already facing duties of 52.95p on every litre of petrol - or diesel - they pump into their hybrid cars on top of paying traditional Vehicle Excise Duty annually.

Walker says that even with eVED's introduction, EVs will still be the most cost-effective option.

'Even with the introduction of a 3p a mile tax on EVs, they will remain cheaper to own and drive,' he said. 

'But with the prospect of more families and businesses left paying more to drive hybrids than EVs, that's a real knock to the nation's productivity. 

'We're spending more to drive than we need to and so less in other parts of the economy.'

Walker's reference to dieselgate comes as the biggest group litigation in English history is ongoing as more than a dozen car manufacturers are alleged to have fitted defeat devices on diesel vehicles made from 2009 onwards to manipulate emissions tests.

The claim - backed by some 1.6 million UK car owners - is the largest of its kind in English history, with the High Court previously told it is believed to be worth at least £6billion.

Among the major car firms embroiled in the case include giants such as Mercedes-Benz, Ford, Nissan, Renault and the Stellantis-owned brands Peugeot and Citroen.