About Author
Sofia Modiri Dockery
I research and write blogs on what’s happening in the EV-world.
Ever wondered where the UK’s fleet market is going? Well, the UK’s shift towards electric vehicles is accelerating, and 2026 is set to be a significant year for companies reassessing their fleet strategies. With more employees expecting benefits that actually suit their needs, a growing interest in premium electric vehicles, tax changes, and the introduction of electric pickup trucks, fleet managers now have a wider array of choices than ever.
If you’re thinking about launching an electric fleet, updating your company car policy, or exploring salary sacrifice as an employment perk, staying informed about the latest trends can help you to make well-informed choices.
Here’s what businesses need to be aware of.
EV adoption across UK fleets continues to grow
Electric vehicles have transitioned from being seen as a new technology to a popular option for businesses and employees aiming to cut CO2 emissions, reduce costs, and ensure their fleets are hitting environmental objectives. SMMT reports that fleet registrations now represent the majority of new battery electric vehicles on UK roads, underscoring the crucial role that businesses play in the country’s shift towards zero-emission transportation.
The lower Benefit-in-Kind (BIK) tax rates continue to serve as a major incentive for company car drivers, currently sitting at 4%, while the reduced servicing and maintenance needs of electric vehicles compared to petrol and diesel options help companies decrease their overall ownership costs. Additionally, businesses are increasingly focusing on sustainability as part of their ESG strategies, making the transition to electric vehicles a vital component in reaching broader business objectives.
How employee expectations around company cars are changing
The company car has transformed from a luxury to a necessity. More and more employees are anticipating that their employers will provide electric vehicle options, especially through a salary sacrifice scheme. As drivers become more familiar with EV technology, many are seeking budget-friendly ways to access the latest models without the large expenses usually linked to private leasing or buying.
Salary sacrifice has made this possible. Employees can enjoy reduced monthly payments due to savings on Income Tax and National Insurance, while also benefiting from low Benefit-in-Kind rates.
For employers, providing electric vehicles through salary sacrifice can enhance recruitment and retention efforts by offering a valuable, contemporary employee benefit that aligns with sustainability goals.
Employers Introducing the Scheme
Employees Going Green
Electric pickup trucks are starting to gain attention
Electric pickup trucks are among the latest innovations in the commercial vehicle sector. While this market is still quite small, more manufacturers are launching electric pickups aimed at fulfilling the demands of businesses that seek practicality without sacrificing their sustainability goals.
Businesses should evaluate their operational requirements, especially when it comes to frequent long-distance towing or maximum payloads, as these elements can significantly affect battery range.
Tax on electric vehicles
Tax continues to be a major consideration for fleet decision-makers. Since 1st April 2025, electric cars have been subject to Vehicle Excise Duty (VED). This means EVs registered on or after this date pay £10 in VED for the first year, rising to the standard annual rate of £200 from the second year onwards. While the first year remains relatively inexpensive, owners should now expect ongoing road tax costs.
There is also an Expensive Car Supplement for electric vehicles. Cars registered on or after 1 April 2025 with a list price over £50,000 are subject to an additional annual charge of £440 for five years.
While these changes have reduced some of the tax advantages EVs previously enjoyed, they remain an attractive option. Benefit-in-Kind (BiK) tax is still highly favourable compared with petrol and diesel vehicles. Although BiK rates are set to increase gradually over the coming years, they remain significantly lower than those for equivalent petrol or diesel models. This allows employees to make substantial tax savings, while employers can also reduce National Insurance contributions through salary sacrifice schemes.
Salary sacrifice still provides exceptional value
Salary sacrifice is one of the most economical methods for employees to drive a new electric vehicle. Many schemes typically offer insurance, servicing, maintenance, breakdown assistance, tyres, and road tax, all included in one fixed monthly payment, giving drivers peace of mind when it comes to their motoring expenses.
For employers, salary sacrifice can deliver a highly appreciated employee benefit. The blend of tax efficiency, reduced operating costs, and easier budgeting keeps these schemes appealing for organisations of any size.
For businesses that are planning for the future, staying informed about legislative updates and adopting a flexible strategy will allow for both cost efficiency and employee satisfaction. Companies that take advantage of these trends now will be in a strong position to reap the rewards as the UK’s electric vehicle market evolves.
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Fleet Evolution offers innovative salary sacrifice schemes, helping employers and employees save on costs while promoting eco-friendly electric cars. Enjoy easy setup, free maintenance, and swift activation for any company size.
FAQs
Yes. Although EVs became subject to Vehicle Excise Duty from April 2025, they continue to offer significant savings through lower Benefit-in-Kind tax, reduced running costs and salary sacrifice schemes.
Typically, the fixed monthly payment includes the vehicle, insurance, servicing, maintenance, tyres, and road tax. This creates a single, predictable cost with no hidden extras.