Why Are Electric Company Cars So Popular Right Now?
If you’ve been job hunting lately, you’ve probably noticed how often a company car pops up as a tempting perk. But here’s the thing: electric company cars are stealing the spotlight, and for good reason. It’s not just about driving the latest tech or doing your bit for the planet—there are some serious financial upsides, too.
Let’s talk numbers. For the 2025/2026 tax year in the UK, the benefit-in-kind (BIK) tax rate for electric vehicles (EVs) is just 3%. Compare that to petrol or diesel cars, which can hit a whopping 37%. That’s not a typo. This means you could save thousands of pounds each year just by going electric. And with energy prices fluctuating, the ability to charge at home (often at off-peak rates) or even at the office if your employer offers it, makes the deal even sweeter.
What’s the Real Benefit of Low BIK Tax for Employees?
You might be wondering, what does a low BIK tax rate actually mean for your wallet? In simple terms, BIK tax is the amount you pay for the privilege of using a company car for personal journeys. The lower the percentage, the less you fork out each month.
Let’s put it into perspective. Imagine you’re offered a company car worth £40,000. If you choose an electric model, you’d be taxed on just 3% of that value—so £1,200. If you’re a 20% taxpayer, that’s only £240 a year. Go for a petrol or diesel equivalent at the highest band, and you’re looking at £2,960 a year. That’s a holiday, a new laptop, or a chunk off your mortgage—just for picking electric.
Which Electric Cars Are the Top Picks for Company Drivers?
With so many EVs on the market, it’s easy to feel overwhelmed. But a few models consistently rise to the top for company drivers, thanks to their blend of range, comfort, and running costs.
The Volkswagen ID 7 is a standout. It’s got the range to handle long commutes, a spacious interior for those who need to haul colleagues or kit, and monthly costs that won’t make your finance team wince. But it’s not a one-car race. Tesla’s Model 3 and Model Y remain popular for their tech and charging network, BMW’s i4 brings that premium badge and a sporty drive, and MG’s 4 EV offers impressive value for money.
Looking for something specific? There are electric hatchbacks for city dwellers, SUVs for those who need space, and estate cars for anyone with a growing family or a love for weekend adventures. The market’s never been more diverse.
How Do Charging and Running Costs Stack Up?
One of the biggest worries for first-time EV drivers is charging. Will you be forever hunting for a plug? In reality, most company car drivers charge at home overnight, taking advantage of cheaper tariffs. According to the UK Department for Transport, over 80% of EV owners do most of their charging at home. If your company offers workplace charging, that’s an added bonus—often at no cost to you.
Maintenance is another win. Electric cars have fewer moving parts than petrol or diesel vehicles, which means fewer things to go wrong. A 2023 study by the RAC found that EVs can cost up to 30% less to service and maintain over three years compared to traditional cars.
Are There Any Downsides to Consider?
No car is perfect, and it’s only fair to mention a couple of potential drawbacks. Range anxiety is less of an issue than it used to be, but if you regularly drive long distances in rural areas, you’ll want to check charging infrastructure along your routes. Also, while the upfront price of EVs can be higher, the tax savings and lower running costs usually make up for it over time.
It’s also worth checking with your employer about their charging policy—some companies are ahead of the curve, while others are still catching up.
What Should You Look for When Choosing an Electric Company Car?
Start with your needs. Do you need space for family or colleagues? Is range a priority, or will you mostly be zipping around town? Don’t forget to factor in charging options at home and work.
It’s smart to test drive a few models, too. The driving experience can vary a lot between brands, and what feels right for one person might not suit another. And don’t be shy about asking your HR or fleet manager for a breakdown of running costs—they’ll usually have the numbers at their fingertips.
The Takeaway: Is an Electric Company Car Worth It?
If you’re weighing up your next company car, electric is hard to beat. The tax savings alone make it a no-brainer for most drivers, and with more models hitting the market every year, there’s something for everyone. Add in the environmental benefits and lower running costs, and it’s easy to see why so many people are making the switch.
So, next time you’re scanning job perks or chatting with your employer, don’t overlook the electric option. It could save you money, simplify your commute, and even make you look forward to Monday mornings. Well, almost.