Electric and Low Emission Company Cars
By FergusWith increasing fuel prices, more congestion zones, car tax changes and higher BiK rates all impacting the cost of running a company car, there has never been a better time to consider an electric or low emission car as your next company vehicle.
But which electric or low emission car is best for you? To help make choosing your next company lease car easier, Nationwide Vehicle Contracts has compiled a list of the top 10 best electric and low emissions cars for business use based on price, fuel efficiency and CO2 emissions.
With the introduction of zero or very low company car tax rates, electric and hybrid cars have become significantly more desirable for company car drivers.
The BiK rate for new electric cars which don't produce any CO2 is 2% for 2024/25. However, the Government announced in its Autumn budget in 2024 that this will rise by one percentage point until 2027/28.
Plug-in hybrids with emissions from 1-50g/km also range from two to 14% for 204/25, with the exact figure varying based on their electric-only range and CO2 output.
“Electric vehicles are by far the most tax-efficient company car to have as zero-emission vehicles are taxed at 2% in 2024/25, 3% in 2025/26, and 4% in 2026/27. That's a huge saving over some of the benefit-in-kind rates for petrol and diesel vehicles, which can be as high as 31%.”
One of the main factors that affects your BiK tax rates is the amount of CO2 the car emits per kilometre driven. The higher the emissions, the higher the BiK tax rate.
Current company car BIK rates start at 2% for electric cars, 22% for the greenest hybrids, and 25% for any vehicle with 100 g/km CO2.
The amount of company car or Benefit in Kind (BiK) tax you pay depends on these factors:
- The carbon dioxide (CO2) emissions per kilometre of your chosen vehicle.
- The value of the vehicle when new, including any optional extras (known as the P11D value).
- Whether you have personal use of the vehicle and have made any individual contribution towards its cost.
- Your personal tax rate.
When deciding on a company car, you want to find a vehicle lease hire suitable for your requirements. If appearances are key, exterior style will be high on your list. You may also need a car that is comfortable and spacious on long commutes.
Whatever you choose, it is worth keeping in mind the amount of company car tax you will be likely to pay. As such, it may be best to look for a vehicle that offers low Benefit-in-Kind (BiK) rates.
With current rules and environmental limitations, current company car tax rates favour electric and low emission vehicles over traditional combustion engine cars. We have listed some examples of cars with low BiK rates, including a mix of electric vehicles and low emission hybrids.
Top 10 Electric and Low Emission Cars to lease in 2024
1. Tesla Model 3
The Tesla Model 3 is a brilliant all-electric choice as a luxury car lease and company car. The Model 3 is roomy inside with comfortable seating for five adults and handles well around bends. It also has an outstanding range of 390 miles and access to Tesla's huge Supercharger network across the UK, making it ideal for business users who travel many miles.
Being fully electric, the Model 3 produces zero tailpipe emissions, meaning it has a 2% BIK tax rate for 2024/2025. This is expected to increase by 1% across the next three years, co could be as high as 5% in 2028.
Pros:
- Futuristic infotainment system
- Excellent range
- Handles well
Cons:
- Fiddly controls
- Expensive
- Build quality could be better
2. Polestar 2
The Polestar 2 is an excellent electric company car option. Featuring a roomy interior with heated seats nestled in a stylish exterior with great ground clearance, there's a lot to love in this vehicle.
With zero tail-pipe emissions, the Polestar 2 qualifies for the lowest band of BiK tax, making it one of the best BiK company cars. This is set at 2% and will remain until 2025, when it will rise by 1% year-on-year/
Pros:
- Exceptional safety
- Excellent build quality
- Seamless pilot assist
Cons:
- Small cargo capacity
- Buggy software
- Inefficient at high speeds
3. Volkswagen ID.4
The Volkswagen ID.4 is the bigger, better brother of the ID.3. An all-electric SUV offering a modern, minimalist interior kitted out with the latest in technology. Offering a range of up to 337 miles and rear-wheel drive as standard, this vehicle the perfect steed for getting to client meetings no matter where they are.
The BiK rate for the Volkswagen ID.4 is 2% until 2025. This is expected to increase by 1% across the next three years, so could be as high as 5% in 2028.
Pros:
- Great interior space
- Spacious boot
- Comfortable to drive
Cons:
- Some tech glitches
- Buggy software
4. Volkswagen ID.3
The Volkswagen ID.3 is an excellent all-electric hatchback if you're looking for something smaller. Inside, the ID.3 is great to drive with plenty of room to ride comfortably, winning various UK awards since its launch, including the Best Small Hatch' at the UK Car of the Year Awards 2021.
The ID.3 has an impressive range of 336 miles meaning you can spend more time on the road. Ideal for company car drivers, it hosts a 2% BiK rate for the 2024/25 tax year. This is expected to increase by 1% across the next three years, so could be as high as 5% in 2028.
Pros:
- Impressive interior space
- Decent infotainment system
- Fantastic range
Cons:
- Interior feels cheap in places
- Quirky switchgear is confusing
- Charging network weaker than Tesla’s
5. BYD Seal
The BYD Seal is a low emission company car that certainly looks the part. Loaded with a range of safety features and a stylish exterior that oozes business smarts, it could be the perfect companion for client meetings.
With an impressive range capability, you can keep yourself on the road for longer than many competitors. The BYD Seal hosts a 2% BiK rate for the 2024/25 tax year. This is expected to increase by 1% across the next three years, so could be as high as 5% in 2028.
Pros:
- Wonderful driving range capability
- Comfortable driving in a stylish interior
- Excellent build quality
Cons:
- No built- in navigation function
- Buggy software
- Low ground clearance
6. Nissan LEAF
A list of the best electric and low emission company cars isn't complete without the Nissan LEAF making an appearance. The LEAF was the world's all-time top-selling plug-in electric car until 2019 when it was overtaken by Tesla. The LEAF's different driving modes assist the LEAF to an impressive 168-mile range. Driving the LEAF feels great as well, thanks to its smooth handling and floor-mounted battery pack with its low centre of gravity.
As an electric vehicle, the LEAF has a 2% BiK rate for the 2024/25 tax year. This is expected to increase by 1% across the next three years, so could be as high as 5% in 2028.
Pros:
- Decent electric performance
- Good real-world driving range
- Well priced
Cons:
- Slow infotainment system
- Interior feels cheap in places
- Comfort could be better
7. Hyundai Ioniq 6
The Hyundai Ioniq 6 aims to take on on the Tesla Model 3 in the premium market, catching the eye with futuristic design and its sleek four-door look. Offering up to 338 miles of range and ultra-fast charging, you’ll be out and about whenever you need to be.
With a future- inspired interior, exceptional infotainment on the dashboard and the steering wheel and premium electric company car comfort, the Ioniq 6 is a perfect choice. This Hyundai hosts a 2% BiK rate for the 2024/25 tax year. This is expected to increase by 1% across the next three years, so could be as high as 5% in 2028.
Pros:
- Excellent driving range
- Great infotainment and on-board navigation
- Self-parking manoeuvres
Cons:
- Delicate wheels
- Odd boot space
- Air conditioning system isn't great
8. MG MG4 EV
The MG4 EV is MG’s first bespoke electric car and is perfect for use as a company car. Packed with style, innovation and up to 281 miles of driving range, this practical hatchback stands out among its competitors.
Featuring a modern exterior, minimalistic cabin design and an impressively large boot, it’s the perfect companion for your travels. The MG4 has a 2% BiK rate for the 2024/25 tax year. This is expected to increase by 1% across the next three years, so could be as high as 5% in 2028.
Pros:
- Fun to drive
- Great value for money
- Impressive design
Cons:
- Poor rear visibility
- Lets in significant road noise
- Fiddly infotainment
9. Peugeot e-208
The Peugeot e-208 is Peugeot's flagship electric car as it attempts to be an all-electric manufacturer by 2030. This hatchback is good-looking, reliable fun and the perfect electric company car.
With a comfortable interior and loads of on-board technology, you can enjoy up to 248 miles of range with this exceptional arrival into the electric car category. The e-208 has a 2% BiK rate for the 2024/25 tax year. This is expected to increase by 1% across the next three years, so could be as high as 5% in 2028.
Pros:
- Inviting interior
- Good drivability
- Good battery range
Cons:
- Lacks back seat space
- Comfort of the drive
- Convoluted touchscreen interface
10. Kia Sportage
The Kia Sportage is Kia's best-selling car model in the UK for a reason. Offering a refreshed, practical interior and an affordable price tag, this vehicle stands out among its rivals as one of the best hybrid company cars for low tax.
The all-new Sportage boasts a powerful and efficient hybrid powertrain and offers an 8% BiK rate – which is set to rise in the 2025/26 tax year to 9%.
Pros:
- Plenty of cargo room
- Solid infotainment system
- Spacious leg room in the rear
Cons:
- Low-powered engine
- Clumsy cabin controls
- Overall economy could be better
Electric cars, also referred to as battery electric vehicles, have an electric motor instead of a traditional internal combustion engine. Electric vehicles use a large traction battery pack to power the electric motor and turn the wheels. The batteries are recharged using grid electricity, either from dedicated charging units or wall sockets.
Electric cars are significantly cheaper to fuel than conventional petrol and diesel vehicles and are also better for the environment as they have zero tailpipe emissions. Learn more about electric vehicles from our electric and hybrid car guides.
For a vehicle to be classed as low emission, it must emit less than 75g of CO2/km from the tailpipe. This makes them cheaper to run than conventional vehicles, making them excellent choices for a company car.
Low emission vehicles are also eligible for the 100% cleaner vehicle discount when entering Congestion Charging Zones.
To learn more about electric and low emission company cars, check out our excellent Electric and Hybrid Car Guides varying from Electric Cars with the Longest Range to Electric Car Running Costs, or call Nationwide Vehicle Contracts on 0345 811 9595 for expert advice. You can also contact us through other methods.
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