Currently reading: New EV incentives revive demand for company cars in the UK
Latest statistics from the Department for Transport show that over half of electric vehicles are company-operated

The UK’s company car parc is returning to pre-pandemic volumes, according to the latest Department for Transport (DfT) data, but incentive-fuelled electrification means fleets operate 40% fewer diesel vehicles than two years ago.

Statistics for the first three months of 2022 show a combined fleet of 2,722,060 company cars in the UK. That’s 46,947 more than during the previous quarter, despite disruption from global material and parts shortages. Only 927,676 company cars were registered during 2021, which is 40% less than the 1,534,290 recorded in 2016. 

It’s a sign of revival after the Covid-19 pandemic. During the first quarter of 2020, there were 2,855,093 company cars in the UK, but changes to work and travel on top of reduced vehicle production contributed to this shrinking by 208,495 units over the following year.

Renewed company car tax incentives for vehicles with CO2 emissions of 50g/km or less (mostly plug-in hybrid or electric models) appear to be stimulating the market. Electric cars are taxed at 2% of their list price (P11d) until April 2025, compared with 25% or more for most petrol or diesel cars, and that offers significant savings for drivers.

The changes have also helped revive the popularity of salary sacrifice schemes, which use the same bands. According to the British Vehicle Rental and Leasing Association (BVRLA), more than three-quarters (78%) of salary sacrifice orders were electric during the fourth quarter of 2021.

Fleets now operate over half (56.0%) of all electric cars, reversing demand that had stagnated due to waning incentives during previous years. Company car tax for electric cars increased from 0% in the 2014/15 tax year to 16% in 2019/20, falling in line with plug-in hybrids and offering limited incentives for drivers.

2 Toyota corolla 2022 front tracking cornering

Since April 2020, the UK’s electric company car fleet has grown from 41,285 vehicles to 247,000. Almost one in 10 (9.1%) company cars is now battery-electric – the Tesla Model 3 was the UK’s best-seller last year – while a quarter (24.9%) are electrified, which includes full hybrids such as the Toyota Corolla and plug-in hybrids such as the BMW 330e

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Diesel, until recently the most popular fuel for fleets, has declined rapidly since the diesel scandal broke in September 2015.  

At the end of 2015, the UK had 1,842,672 diesel company cars, a 67.8% share of the total. That volume fell to 1,308,319 units by the first quarter of 2020 and has shrunk by a further 40% since – to 828,461 cars, or a 30.4% share. 

Meanwhile, almost half of the total (44.6% or 1,214,460 units) is now petrol-powered, according to the DfT.

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artill 22 July 2022

Great, we are all paying more tax, the country is increasing its debt, and some Company car drivers are getting a cheaper car. Someone somewhere must be really pleased with such a great plan they thought up. At least we can be pleased there are less diesels out there...

si73 22 July 2022
I was thinking similar. Great if you can have a company car as now an EV is ridiculously cheap compared to anything else, whereas the private buyer will still struggle to attain one.
Agreed, at least more diesels aren't being used, but the latest diesels are pretty clean and can go a lot further far more easily than an EV for the high mileage co car user.