Diesel
Fleets were at the forefront of the ‘dash for diesel’ in the early 2000s, as drivers jumped at new CO2-based tax breaks and their employers benefitted from efficient new vehicles. Within two years of moving to a CO2-based company car tax, HMRC found that diesel had doubled its share of the market to 60% while average fleet CO2 emissions had fallen by 15g/km.
Today, the ‘dash’ is away from diesel engines, as air quality debates have soured public opinion, exhaust after-treatment systems have made the cars more expensive, and manufacturers have stopped offering it in some models. However, diesel engines still have a role: they’re quieter than ever, offer long ranges and high efficiency, and the latest Euro 6d emissions regulations mean they’re usually no worse for air quality than their petrol counterparts.
Where does a diesel company car work best? As a tool for covering long distances easily and efficiently, or for pulling heavy loads, diesel is still hard to beat.
Autocar's company car tax calculator shows exactly what you'll pay for every make and model
Petrol
Petrol is the most widely used fuel in the UK, and its global popularity means it’s the focus of R&D efforts for the final years of the combustion engine. Modern fuel injection systems and the addition of ‘mild hybrid’ technology – a very light form of electrification – is narrowing the fuel efficiency gap with diesel engines.
However, that gap still exists. Petrol cars still can’t match the efficiency of a diesel engine and – for the first time – company car tax doesn’t differentiate between them now that all new cars have to comply with RDE2 on-road pollution limits. Their main advantage is there’s a broad range of cars and they also avoid the need for the expensive exhaust after-treatment systems that are eroding the business case for diesel engines.
Where does a petrol company car work best?
Small cars with a low list price and ‘perk’ company car drivers who aren’t racking up large annual business mileage.
Hybrid
Full hybrids (also known as ‘self-charging’ hybrids) are usually petrol powered, but with one or more electric motors providing assistance under load. They’re an easy stepping stone for drivers, providing diesel-like efficiency without the need to plug in. The electric range is short and delivered in bursts, when the powertrain isn’t working very hard.
The trade-off is that list prices and CO2 emissions are usually on par with those of an efficient diesel car, so there’s little or no benefit-in-kind advantage for drivers. Because most manufacturers are focusing on plug-in hybrids, there’s also a limited range of products to choose from. In 2019, 80% of hybrids registered in the UK were either a Toyota or Lexus.
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