New data from HMRC reveals a dramatic decline in the number of company cars running on diesel, and a sharp fall in fleet emissions.

The latest Benefit in Kind statistics show that only 35% of company fleets used diesel in the 2021/22 tax year, as opposed to 49% in 2020/21. To put this into perspective, 80% of company cars in 2017 were diesel-fuelled.

While this has led to a slight increase in petrol vehicles, rising from 315,000 to 345,000, the biggest switch has been towards electric vehicles. 17% of company cars (125,000) were fully electric in 2021/22, more than double the figure from the previous year (50,000).

The increase in electric company cars, which has been driven by low benefit-in-kind (BIK) tax rates, has helped reduce the average CO2 emission rate of company cars to 86g/km – down from 99g/km in 2020/21.

Even after excluding EVs, the average CO2 emission rate has reduced to 103g/km, confirming a trend towards lower emission fossil fuel cars.

The number of ultra-low emission vehicles (ULEVS), with CO2 emissions no greater than 75g/km (but not zero emission), has also increased steadily in recent years from 5,000 in tax year 2014/15 to 118,000 in 2021/22.

20 years ago, more than half (58%) of company cars had reported emissions in excess of 165g/km. That has now fallen to just 2% of the company car fleet due to fossil fuel cars becoming more efficient and an increasing share of company cars powered exclusively by electricity.