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Electric vs Hybrid Company Cars
How 2026-27 Benefit in Kind percentages and running costs compare for pure electric and plug-in hybrid company cars. Educational only — not a recommendation of which car to choose.
Quick Summary
Pure Electric (BEV)
Plug-in Hybrid (PHEV)
BiK Tax Comparison (2026-27)
Plug-in Hybrid BiK Rates by Electric Range
| Electric Range | BiK Rate | Example Models |
|---|---|---|
| 130+ miles | 4% | BMW i5 xDrive40 M Sport (PHEV with extended range) |
| 70-129 miles | 7% | Mercedes C300e, Volvo XC60 Recharge |
| 40-69 miles | 10% | BMW 330e, Audi A3 TFSI e |
| 30-39 miles | 14% | Ford Kuga PHEV, Peugeot 3008 Hybrid |
| Less than 30 miles | 16% | Older PHEV models with limited battery |
* Electric range measured on the WLTP cycle. Figures are 2026-27 HMRC appropriate percentages. Pure electric vehicles with 0 g/km CO₂: 4% in 2026-27 (3% in 2025-26; then 5%, 7%, and 9% in 2027-28, 2028-29, and 2029-30).
Tax Cost Example (£45,000 Car)
Running Cost Comparison
Annual running costs for 15,000 miles/year (typical company car usage):
Pure Electric
Plug-in Hybrid
* PHEV costs assume 60% electric, 40% petrol usage. Actual costs vary based on charging frequency and driving patterns.
When to Choose Electric vs Hybrid
Choose Pure Electric If:
- You have off-street parking for home charging
- Your daily commute is under 200 miles
- You want the lowest zero-emission BiK rate (4% in 2026-27)
- You prioritise running cost savings
- Most journeys are local or regional
- Public charging network available for longer trips
Choose Plug-in Hybrid If:
- You can't charge at home consistently
- You regularly do long-distance journeys (200+ miles)
- You want flexibility without range anxiety
- Your area has limited charging infrastructure
- You need to tow (some PHEVs have towing capacity)
- Longer-range PHEVs sit in the 4–10% BiK bands in 2026-27
3-Year Total Cost of Ownership
Example: £45,000 list price, 15,000 miles/year, higher-rate taxpayer (40%), 2026-27 tax year
* Includes BiK tax, fuel/charging, servicing, tyres, insurance. Excludes depreciation (company car). Higher mileage increases EV advantage.
Using Car Cost Comparison
Car Cost Comparison can show modelled Benefit in Kind for electric and plug-in hybrid company cars, or personal purchase and lease costs, using the same list price and emissions:
- Model BiK from P11D value, CO₂ and electric range
- See the income-tax figure on that cash equivalent at a chosen tax band
- Compare personal cost of ownership over the term you choose
- Apply 2026/27 PHEV bands that follow electric range
- Include employer Class 1A NI on the company-car side
Figures are illustrative. They are not a recommendation of which car to choose.
Open Car Cost ComparisonImportant Information
- • This is educational content only and does not constitute financial advice
- • Zero-emission BiK rates are published through 2029-30 but wider policy may change in future budgets
- • Actual running costs vary based on driving patterns and charging habits
- • Consider your individual circumstances, driving patterns, and charging access
- • Test drive vehicles to understand real-world range and usability
Further Resources
- GOV.UK - Company Car Tax and Benefits
Official BiK rates for EVs and hybrids
- GOV.UK - Vehicle tax for electric cars
2026/27 VED rates for electric and low-emission cars. The passenger-car plug-in grant has ended; remaining grants are for some vans, taxis and motorcycles.