Cheap tax increasingly big pull in fleet EV growth
Cheap tax and charging have made employee demand one of the biggest catalysts for the UK’s fast-growing fleet of electric company cars, according to a new survey by leasing firm Arval.
Almost a third (30%) of British fleets are deploying electric cars to fulfil requests from company car drivers, according to the latest Arval Mobility Observatory Barometer.
That share is 50% higher than in 2025, when 20% cited it as a reason to switch, and not far behind reduced environmental impact – this year’s top-rated answer, at 32% of responses.
Ultra-low tax bands for EVs have made them an appealing option for company car and salary sacrifice schemes. The latest British Vehicle Rental and Leasing Association (BVRLA) data shows half of all members’ business contract hire cars and 77% of new salary sacrifice deliveries were battery-electric in the final quarter of 2025.
Arval’s survey shows broad approval of EVs, with only 11% of fleets facing pushback from drivers (down from 16% in 2025), while only 16% said range was a barrier. One in three (30%) are motivated by improving their company image, compared with 24% in 2025.
John Peters, head of Arval Mobility Observatory in the UK, said employers are experiencing higher driver demand while leveraging the faster adoption rates for electric cars to balance out a slower transition to battery-powered vans.
That’s supported by a wider choice of vehicles, enabling fleets to be more selective with what they offer and negotiate better prices, without restricting options for drivers. There are 167 different electric cars available in the UK, according to the Society of Motor Manufacturers and Traders (SMMT), compared with 102 in 2024.
“The proliferation of salary sacrifice is driving a lot of the EV uptake. More companies are adopting salary sacrifice [and] within those fleets, more people are taking an EV who didn’t have one before,” Peters told Autocar.
“We are also seeing more company car fleets electrifying their choices. There’s less tolerance now for offering anything other than electric or hybrid, because there’s enough choice to justify going down that route.”
Cost sensitivity plays out in Arval’s data, with lower fuel costs (31%) coming a close second to environmental impact (32%) as a reason to go electric. Peters said this is also motivating drivers, who have a heightened awareness of both fuel costs and availability since tensions escalated in the Middle East at the end of February.
Meanwhile, 28% of fleets are deploying electric cars to reduce their tax costs, up from 23% last year, but 33% claimed that adoption was being held up by higher purchase prices while almost one in three (30%) say model ranges are too limited (23% in 2025).
The survey also highlights practical challenges. A lack of public and home charging points were the two most common adoption bottlenecks (41% in each case), while only 27% offer workplace charging points.
Peters said: “The differential on cost for charging your vehicle between home and public is huge. If you’re comparing 6-7p overnight with almost £1 per kWh, that is a material differential.
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