Sales of electric cars to fleet and business customers continue to head the new car market in 2025.
After four months, fleet and business cars sales are taking 61% of the new car market as company drivers choose cars with a plug attached – mainly fully electric cars (EVs) but also plug-in hybrids (PHEVs) thanks to attractive benefit in kind rates on these zero and ultra low emission cars.
The company car tax rates for 2025 and beyond to 2029/30 were confirmed in Autumn Budget 2024, offering certainty to both fleets and drivers about company car tax both now and in the future to ensure proper planning on replacement cycles.
It means that company car drivers can now plan and choose which company cars are best to beat benefit in kind taxation (BIK).
Company car tax is based on a scale rating depending on the vehicle emissions. Electric cars have zero emissions and are therefore in the lowest bracket, while ultra-low emission PHEVs are graded on the scale depending on how far they can travel on the battery alone.
While not as low on tax as EVs, for the next three financial years PHEVs still make a lot of financial sense for company car drivers, especially for those drivers that feel they are unready to make the step to full electrification.
Beyond three years, though, and the tax efficiency of PHEVs drops markedly as the tax banding more than doubles, leaving a full EV as the best way to beat BIK for a company car driver.
For example, the company car driver in a PHEV with an electric only range of between 70 to 129 miles will pay tax at the rate of 6% (FY 25/26), 7% (FY 26/27), and 8% (FY 27/28). But the following tax year it leaps to 18%. Meanwhile the driver of an EV will pay at a percentage rate that is less than half that of the PHEV in the 28/29 financial year.
The company car tax tables below show how this works out:
| CO2 (g/km) | Electric only range (miles) | Tax year 2025/26 | Tax year 2026/27 | Tax year 2027/28 | Tax year 2028/29 | Tax year 2029/30 |
|---|---|---|---|---|---|---|
| 0 | N/A | 3% | 4% | 5% | 7% | 9% |
| 1-50 | >130 | 3% | 4% | 5% | 18% | 19% |
| 1-50 | 70-129 | 6% | 7% | 8% | 18% | 19% |
| 1-50 | 40-69 | 9% | 10% | 11% | 18% | 19% |
| 1-50 | 30-39 | 13% | 14% | 15% | 18% | 19% |
| 1-50 | <30 | 15% | 16% | 17% | 18% | 19% |
| 51-54 | 16% | 17% | 18% | 19% | 20% |
So, the medium-term outlook for company car drivers in EVs remains highly tax advantageous over the next five years, while company car drivers that choose PHEVs can enjoy beneficial tax breaks for three years.
Company car tax and choosing the right EV are important considerations for those drivers who can lease a car through a salary sacrifice programme.
As the name implies, salary sacrifice means an employee ‘sacrifices’ some of their gross salary to pay for the car. This reduces the amount of income tax or Class 1 National Insurance Contributions (NIC) on the portion of salary sacrificed – these considerable savings make the lease of an EV worthwhile. The changes to NIC from 06 April make little alteration to these savings..
However, because the taxman sees the car as a benefit, salary sacrifice takers are subject to benefit-in-kind tax. Which is why it is vital to choose a BIK tax saving EV (or PHEV) to make the most of savings from such salary sacrifice schemes.
Here are our suggestions for the top EVs and PHEVs in 2025 and a couple coming up in the next 12 months or so that are worth watching out for. The tax quoted is calculated using our company car tax calculator using a 20% salary rate.
With a sloping rear roofline but high-riding looks, the Citroën ë-C4 is a coupé SUV, but there’s still plenty of room for the family and luggage in this medium-sized car. Citroën claims it’s velvety smooth, majoring on a comfortable ride with ‘Advanced Comfort’ suspension and ‘Advanced Comfort’ seats, which in the latest upgrade got even plumper. You can choose two batteries, depending on price, for either a maximum 219-mile range (in the Plus version here) or 257 miles (Max version). Company car drivers will see their tax bill helped by a price reduction of over £5,600 versus the outgoing model (starting at £26,295).
On sale this spring, the Grande Panda Fiat is harking back to the original Giugiaro designed box-on-wheels of the 1980s, and bringing a bit of fun into small affordable electric cars. There’s a hybrid and an electric version of the Grande Panda, and the big news here is a very handy detail. The Grande Panda is the first proper EV to have a built-in 4.5m-long charging cable which retracts into the front like a vacuum cleaner. You can charge it at home with a 7kW wall box, or using an extra cable at public 100kW chargers. There are only two trims to choose from; Red which is a little basic or La Prima which has nice extras such as a bamboo-fabric dashboard.
Chinese carmaker BYD has been storming up the company sales charts, and the Seal is a sleek saloon aiming at the Tesla Model 3 market. There’s also an SUV called the Seal U. Like the Tesla it also has a front boot or ‘frunk’, handy for storing charging cables.
There’s a panoramic glass roof, and a luxurious interior. The single motor Design model here claims a very competitive 354-mile maximum range, and the other Excellence version with two motors for four-wheel drive, 324 miles.
Later this year, Seal models will have an upgraded 800-volt electrical system, which means they can charge even faster, reducing charging times by a claimed 30%. There’s a new dashboard design and there’ll be an improved semi-autonomous driving function.
Launched late last year, the Peugeot E-408 is an SUV coupe (in addition to the petrol 408) which provides more space as its wheelbase is stretched to provide more legrom for the rear passengers – in fact Peugeot says it’s the most spacious of its models. Long-distance company car drivers should note the front seats, independently approved by a German association of ergonomics and back health experts, with 10-way electric adjustment and two memory settings for the driver. They are also heated.
Like all the latest Peugeots, the E-408 has generative AI, ChatGPT, so you can ask it many questions or to invent a story for the kids. For music, there’s a FOCAL Premium Hi-Fi sound system.
The Tesla Model Y has been a familiar sight for many years, but we’re only now getting the latest updated version of this capacious electric SUV, which has undergone a detailed redesign. The new super slim front lighting boosts aerodynamic efficiency. The interior trim has been improved to make it feel plusher – there’s fabric instead of wood on the dashboard – and the cabin is quieter thanks to sound-deadening measures such as thicker glass and a new design of tyre. Tesla has also addressed one of the old car’s biggest faults, its bumpy ride. As before there’s a huge boot as well as the front boot or frunk.
There’s the expected clever tech such as the ability to drive the car out of a tight parking space standing outside and using your smartphone. Oh, and you can watch Netflix on the infotainment too.
You may think that Volvo had gone SUV-only, but it recently re-introduced big estates, and now it says this electric flagship ES90 is a mix of saloon, fastback, and SUV. It’s a five-door hatchback with acres of rear legroom and three rear seats which can be folded down individually. The 22-litre frunk can house the charging cables.
Talking of charging, the ES90 is the first Volvo to have 800-volt technology for a longer range and faster charging. It’s claimed to take on 186 miles of range in 10 minutes at 350kW fast charging stations.
Volvo has paid special attention to a quiet cabin environment, but should you wish, the top-line Bowers & Wilkins audio system has a special mode replicating the sounds of London’s Abbey Road Studios.
BMW has unveiled the new iX3 electric SUV heralding a completely new look (Neue Klasse) and advanced new tech for future models. BMW has already been giving out details of its development and we know that it’ll have radical new battery technology, with a range of up to 500 miles reported in some quarters. Likewise, an 800-volt system could add up to 200 miles in 12 minutes given the right charger. The new iX3 won’t be in the UK until early 2026, but is eagerly awaited.
At 4.8 metres long the Hyundai Santa Fe PHEV is a supersized petrol/electric SUV with six (two plus) or seven seats. It’s so lofty that there’s a hidden handle in the rear pillar so you can haul yourself onto a rear tyre to adjust a luggage box. Like the Tesla Model Y, it can pull itself out of a parking space without you in it. The plug-in hybrid here only comes with four-wheel drive, so it’ll be capable of crossing muddy campsites.
In the six-seater, the second row seats feature motorised ‘captain’s chairs’ and there’s storage everywhere and thoughtful features such as built-in sunscreen curtains in the rear doors. There’s wireless charging for two phones in front and USB-C points everywhere.
The Jaecoo name is very new to the UK (Jaeger and cool in case you were wondering), only launched this year along with sister brand Omoda, both part of the giant Chinese car producer Chery. The Jaecoo 7 is a mid-sized SUV competing with the likes of the Volkswagen Tiguan. The plug-in hybrid is front-wheel drive with a seven-speed automatic gearbox.
The hybrid system helps the 7 achieve a good electric-only driving range of 56 miles, and unlike most PHEVs, you can fast charge a Jaecoo 7 on a public charger at up to 40 kW, which will boost the charge from 30%-80% in 40 minutes. The car can also act as an energy supply, with a three-pin socket in the boot.
Like a Tesla or a BYD there’s a huge central touchscreen but the speed is visible on a smaller screen in front of the driver. For the price, the standard equipment is generous and includes a panoramic sunroof, leatherette upholstery and heated and powered front seats.
Despite the newer electric Mercs, the traditional Mercedes E-Class petrol or diesel saloon and estate are very much with us and bang up to date with plug-in hybrid versions. The dashboard is one huge screen which swoops across the car. The front passenger can view phone apps and streaming content on their side whilst it’s blocked from the driver. Talking of the interior, there’s acres of room for everybody.
The E300e plug-in hybrid is the most powerful E-Class in the range, as its combined electric motor and 2.0-litre turbo petrol engine put out 328bhp. A nine-speed automatic gearbox is standard for serene cruising. The class-leading electric-only range will allow up to 70 miles on battery power alone, so you could run this big car in EV mode for several days of short trips.
MG continues to carve out a reputation for cost-effective cars, and the new generation of the HS large SUV (MG’s largest in the UK) builds on this with more space and sleeker looks than its predecessor. The 1.5-litre plug-in hybrid version has an outstanding electric-only range of up to 75 miles thanks to a large battery of 24.7kWh, which is almost as big as the Mercedes E300e. That’s also double the range of the previous model.
The HS PHEV starts at £31,995, which makes it a very attractive company car prospect. For an extra £2,500 Trophy specification adds a wireless charging pad, upgraded sound system, a 360-degree surround-view camera, dual-zone air-conditioning, a power tailgate and leather effect upholstery.
The Rafale is a new name for Renault’s latest flagship model, and this large coupé SUV now comes as a plug-in hybrid. A three-cylinder 1.2-litre petrol engine at the front combines with an electric motor at the rear and a 22kWh battery to provide a sporty total of 300bhp. It also has a four-wheel steering system, which Renault claims reduces the turning circle by 1.2m.
The Rafale has a modern style which draws heavily on Renault’s sporting brand Alpine, so both trim levels (prices start at £45,695) are Alpine-themed – techno esprit Alpine and atelier Alpine. The latter has matte Satin Summit Blue bodywork, a Diamond Black floating spoiler, 21-inch ‘Chicane’ alloy wheels and a specially tuned chassis developed with Alpine Cars. It also has adaptive suspension and a power closing tailgate.
The new generation of Volkswagen’s best-selling mid-size SUV weighs in with a very useful all-electric range of 73-75 miles thanks to a revised 1.5-litre petrol engine and a bigger battery than the last Tiguan.
Like all plug-in hybrids, the Tiguan eHybrid’s petrol engine will step in to charge the battery, but if you want to charge it yourself away from home it can now take rapid AC and DC charging for the first time. A rapid charge at 50kW will give a 5-80% top-up in about 25 minutes.
The Tiguan eHybrid has two engine power levels (204 and 272 PS) the latter is in sporty R-line trim and comes with adaptive dampers which you can set yourself depending on how firm or soft you want the ride to be. Both versions have Volkswagen’s six-speed DSG automatic gearbox.
The sleek new petrol-engined Audi A6 will be joined by a plug-in hybrid – sure to be a company car favourite. The new A6 Saloon and estate Avant e-hybrid quattro models will be available in the UK with a 299PS drivetrain and the potential for an electric-only driving range of up to 64 miles. Maximum AC charging power is now 11 kW, and if the battery is completely empty, a full recharge to 100 percent can take as little as 2.5 hours. All e-hybrid quattro variants have an all-wheel steering system to boost agility in city traffic and tight bends by turning the rear wheels up to five degrees in the opposite direction to the front wheels at speeds of up to 37mph.
If you’re looking for the best company car deals, check out our latest special offers, or view our electric car salary sacrifice page to learn more about our unique employee benefits scheme. And don’t forget – we’re always happy to assist you.
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