THE Electric Car Grant, introduced by the Government on 15 July 2025, introduced the concept of a verified Science-Based Target (SBT) for OEMs in order for them to qualify for the grant.
The SBTs are ambitious plans to eliminate carbon using a science-based, robust, and credible framework to reach net zero by 2050.
So far 17 models – from Citroen, Nissan, Renault and Vauxhall – are eligible for the band two grant of £1,500 discount. At present, none has qualified for the higher £3,750 tier one Electric Car Grant.
Such an SBT approach could be applied to the benefit in kind taxation of company cars in the future, believes fleet software specialist company FleetCheck.
Peter Golding, CEO says it is the first time such a comprehensive set of sustainability measurements has been applied to any government initiative of this type.
“Current taxation intended to encourage cleaner vehicle use – such as benefit in kind for company car drivers and road fund licence – is based around the CO2 output of the vehicle at the tailpipe. It’s quite a blunt instrument and what the government is applying here appears to be much more subtle.
“It is a development that might potentially provide an insight into current government thinking. There could be some awareness and concern about the higher manufacturing impact of EVs and a determination to reward cleaner processes.
“While we are claiming no particular intuition about government strategy, this does seem to us to represent something of a shift.”
Peter said any movement along this path was unlikely to occur quickly with the government having already provided benefit in kind taxation tables until the end of the decade based on the current banded CO2 system.
“It may be that the Government is looking ahead to a moment in the medium term when almost all company cars are electric with zero tailpipe emissions. At that point, they may instead want to look at the wider environmental impact of each model, including not just manufacturing but transportation to market, recyclability and more.
“Certainly, this would make sense in terms of encouraging more sustainable behaviour from manufacturers and fleets as the EV revolution progresses.”
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
