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.
Why should I consider an electric vehicle or low emission car as a company car?
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. As a result, the BIK rate for new electric cars which don't produce any CO2 has dropped from 16% to 1%. New plug-in hybrids with emissions from 1-50g/km have also come down to between three and 13%, varying on their electric-only driving range and CO2 output.
“Electric vehicles are by far the most tax-efficient company car to have as zero-emission vehicles are taxed at 0% in 2020/21, 1% in 2021/22, and 2% in 2022/23. That’s a huge saving over some of the benefit-in-kind rates for petrol and diesel vehicles which can be as high as 27%.”
How do CO2 emissions affect the BIK rates?
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 Benefit-in-Kind (BiK) tax rate.
Current company car BIK rates start at 1% for electric cars, 22% for the greenest hybrids, and 24% 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
What are the best electric and low emission cars?
When deciding on a company car, you want to find a vehicle lease hire that is 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 2021
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 254 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 1% BIK tax rate for 2021/2022, which rises to 2% for the 2022/2023 tax year. This equates to around £82 tax per annum (at 20%) for the Standard Range Plus Auto, rising to £120 tax per annum (at 20%) for the Performance AWD Auto for 2021/2022.
Pros:
- Futuristic infotainment system
- Excellent range
- Handles well
Cons:
- Fiddly controls
- Expensive
- Build quality could be better
2. 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 also has a 1% BIK tax rate or 2021/2022. This equates to around £62 tax per annum (at 20%) for the Life Pro 58kWh 145PS Auto, rising to £78 tax per annum (at 20%) for the Tour Pro S 77kWh 204PS Auto for 2021/2022.
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
3. Porsche Taycan Saloon
If you're looking for a luxury, fully electric saloon, the Porsche Taycan may be the car for you. With its curvy bonnet, subtle air intakes, sloping roofline and electrifying looks, the Taycan indeed turns heads. The interior is also great, with a widescreen digital driver's display in Porsche's trademark analogue rev-counter.
The Taycan is excellent to drive and has a range of 268 miles before you'll need to plug it back in to charge. It's also a great choice of car for company car drivers as it has a 1% BIK tax rate for 2021/2022, rising to 2% for the 2022/2023 tax year. This equates to around £141 tax per annum (at 20%) for the 300kW Auto for 2021/2022.
Pros:
- Looks amazing
- Comfortable to inside
- Great to drive
Cons:
- Poor boot space
- Not a lot of back seat space
- Expensive
4. BMW i3
If you want to be as environmentally friendly as possible when choosing your next company car, the BMW i3 is for you. Not only does this small city car produce zero-CO2 emissions, but it's also up to 85% recyclable. When producing the i3, BMW used 27 used plastic bottles in every car to form parts of the doors and seats.
The BMW i3 is also excellent to drive as its size and nippiness make it ideal for narrow roads and stop-start traffic in busy cities. The i3 has a 1% BIK tax rate for 2021/2022, which rises to 2% for the 2022/2023 tax year. This equates to around £68 tax per annum (at 20%) for the 120Ah Auto for 2021/2022.
Pros:
- Futuristic interior
- Good infotainment system
- Nippy and fast
Cons:
- Small boot
- Expensive
- Not a lot of space inside
5. Audi e-tron Estate
The Audi e-tron Estate is Audi's first full-electric vehicle and it looks like something straight from the future. Along with its striking looks, the e-tron estate is capable of up to 252 miles of range before you'll have to stop and recharge. It handles well on the road and has plenty of room inside, winning the Best Large Electric Car for Comfort at the WhatCar? Car of the Year Awards 2021.
As the Audi e-tron is an all-electric vehicle, it also has a 1% BIK tax rate for 2021/2022. This equates to around £122 tax per annum (at 20%) for the 50 quattro Technik 230kW Auto, rising to £188 tax per annum (at 20%) for the 55 quattro Vorsprung 300kW Auto for 2021/2022.
Pros:
- Spacious back seats
- Great high-tech cabin
- Comfortable to drive
Cons:
- Average range
- Expensive
- Not great in tight corners
6. Volvo XC90
If you're looking for a practical company car with low emissions, the Volvo XC90 is a great option. The XC90 is an unexpectedly fast seven-seat hybrid SUV with a well-equipped interior. Under its bonnet, there is a 2.0-litre four-cylinder petrol engine which, in combination with the electric motor, delivers an impressive 395bhp. Plus, on those long company trips, the Volvo XC90 T8 can travel up to 25 miles on a charged battery only, meaning you can have peace of mind rather than worry about where you next have to fill up.
With current Benefit-in-Kind tax bands, the Volvo XC90 T8 Recharge offers a low 11% BIK rate for 2021/2022. This equates to around £4051 tax per annum (at 20%) for the B5 (P) AWD Momentum 250HP Automatic, rising to £5063 tax per annum (at 20%) for B6 (P) AWD Inscription Pro 300HP Automatic for 2021/2022.
Pros:
- Great performance for an SUV
- Plenty of space inside
- Stylish looks
Cons:
- Average range
- Not great on long journeys
- Expensive
7. Tesla Model S
The Tesla Model S may be one of the more pricey vehicles on the list, but the Model S Long Range AWD Auto Saloon model is the market-leading electric vehicle. The Model S has a whopping 370-mile range from one single charge, which is the longest range of any car on the road. Inside the Tesla, it has plenty of room and is excellent to drive as you feel the vehicle's instant power behind the wheel. With the Model S, you also have access to over 290 Tesla Superchargers in the UK, perfect for long road trips.
As the Model S is a fully electric vehicle, you don't have to worry about high BIK tax rates as it produces zero emissions. The Model S has a 1% BIK tax rate for 2021/2022, which rises to 2% for the 2022/2023 tax year. This equates to around £168 tax per annum (at 20%) for the Long Range AWD Auto, rising to £262 tax per annum (at 20%) for Plaid+ AWD Auto for 2021/2022.
Pros:
- Excellent range
- High-tech cabin
- Extremely quick
Cons:
- Expensive
- Heavy
- Cheap interior quality
8. Audi A3 Sportback
TheAudi A3 40 TFSIe is a plug-in hybrid version of the regular A3, meaning it combines a regular petrol engine with an electric motor to reduce the vehicle's emissions. Inside the A3, there's enough room to ride comfortably with its spacious cabin, hugging seats and high-class interior.
This hybrid version of the Audi A3 can officially travel for up to 40 miles without using a drop of fuel, giving it a 7% BIK for 2021/2022, rising to 8% for the 2022/2023 tax year. However, if you fancy going for the S line trim model, the BIK Tax rate rises to 11% for the 2021/2022 tax year. This equates to around £475 tax per annum (at 20%) for the 40 TFSI e Sport 204PS S Tronic, rising to £827 tax per annum (at 20%) for 45 TFSI e S Line Competition 245PS S Tronic for 2021/2022.
Pros:
- Decent electric range
- Impressive interior
- Good acceleration
Cons:
- Reduced boot space
- Heavy handling
- Ride comfort could be better
9. BMW iX3
The BMW iX3 is the first fully electric SUV BMW has ever produced and it looks impressive. It offers an excellent range of up to 279 miles between charges and handles well with instant acceleration. Looks aside, the iX3 is also incredibly practical as a company car. It's ideal for work as the iX3 offers plenty of space onboard for any cargo or luggage. The iX3 is very similar to the petrol and diesel-powered BMW X3 SUV; however, running costs are reduced as it's fully electric.
With current Benefit-in-Kind tax bands, the BMW iX3 has a 1% BIK rate for 2021/2022, rising to 2% for the 2022/2023 tax year. This equates to around £119 tax per annum (at 20%) for the 80kWh M Sport 210kW Auto to £130 tax per annum (at 20%) for 80kWh Premier Edition Pro 210kW Auto for 2021/2022.
Pros:
- Well built
- Spacious and practical
- Drives well
Cons:
- Faster alternatives
- Not so stylish
- Comfort could be better
10. 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 miles 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 1% vehicle tax liability for company drivers in the tax year 2021/22. This equates to around £57 tax per annum (at 20%) for the Acenta 40kWh Auto, rising to £70 tax per annum (at 20%) for e+ Tekna 62kWh Auto for 2021/2022.
Pros:
- Decent electric performance
- Good real-world driving range
- Well priced
Cons:
- Slow infotainment system
- Interior feels cheap in places
- Comfort could be better
What is an electric car?
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.
What is a low emission vehicle?
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.
Want to know more about company car leasing?
To find out 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.
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