Plug-in hybrid cars (PHEVs) are about to face tougher emissions tests starting in 2025, aiming to better reflect real-world driving. These changes could hit company car drivers hard, with some PHEVs potentially moving up several tax bands as a result of higher CO2 emissions being recorded.
The current Euro 6e emissions standards will be replaced by stricter Euro 6e-bis tests. From January 1, 2025, all newly launched models will need to comply, and by December 31, all cars on sale—including older models—will need to be retested to meet the new requirements.
Previously, emissions tests simulated 800km (497 miles) of driving. Under Euro 6e-bis, this will jump to 2,200km (1,367 miles), a distance designed to better capture how PHEVs perform in real life.
Take the BMW X1 xDrive25e, for example. In current tests, its CO2 emissions are around 45g/km, putting it in an 8% Benefit-in-Kind (BiK) tax band. Under the new standards, emissions jump to 96g/km, pushing the tax band to 24%—similar to highly efficient petrol-only cars.
According to the International Council on Clean Transport (ICCT), the current test system doesn't reflect how PHEVs are actually driven. Many plug-in hybrids rely more on their petrol engines than expected, leading to higher real-world fuel consumption and emissions than official figures suggest.
The ICCT said, “Over the past several years, it has become evident that the currently used UF curve does not reflect the real usage of PHEVs resulting in unrepresentatively low official CO2 emission values.
“This leads to an excessive gap between the real-world fuel consumption and the official value determined during type-approval.”
Another step, called Euro 6e-bis-FCM, is planned for 2027. It will test vehicles over a whopping 4,260km (2,647 miles). Under these conditions, the same BMW X1 would see emissions rise to around 122g/km, likely increasing its tax band further.
The new rules apply only to cars bought brand new. Existing company car drivers won’t see their tax bands updated. This differs from the upcoming introduction of road tax (VED) for electric vehicles, which will apply to both new and existing EVs later this year.
If you’re a company car driver or planning to buy a PHEV, these changes could make a big difference to your costs.
