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Euro 6e-bis: What Plug-in Hybrid Drivers and Fleet Managers Need to Know in 2025

What is Euro 6e-bis and Why Does it Matter?

On January 1st, 2025, the European Union introduced the Euro 6e-bis emissions standard, a new regulation that brings stricter testing procedures for plug-in hybrid electric vehicles (PHEVs). This update aims to close the gap between lab-based emissions results and actual real-world driving conditions, ensuring more accurate reporting of CO₂ emissions.

Although the UK has left the EU, it has historically aligned with EU vehicle emissions regulations, and similar rules still apply to vehicles sold and registered in the UK post-Brexit.

The introduction of Euro 6e-bis is expected to have a significant impact, especially on company car drivers, as it could affect Benefit-in-Kind (BIK) tax rates. Since BIK is calculated based on a vehicle’s CO₂ emissions, higher real-world figures could lead to increased tax costs for drivers.

So, what exactly is Euro 6e-bis?

It’s an enhanced version of the existing Euro 6 emissions standard, specifically targeting plug-in hybrids, to improve accuracy and accountability in emissions reporting.

This standard will apply to all newly launched PHEV models from January 1st, 2025, and to existing models from December 31st, 2025.

Changes Under Euro 6e-bis:

  • Extended Testing Distance:
    The simulated driving distance for emissions testing will increase from 800 km (497 miles) to 2,200 km (1,367 miles). This change aims to better reflect real-world driving by evaluating vehicle performance over a much longer distance, providing more realistic and reliable data.
  • Revised Utility Factor (UF):
    The Utility Factor, which determines the balance between electric and combustion engine usage in testing, has been updated to better align with actual usage patterns in real-world driving.

These adjustments are expected to result in higher official CO₂ emissions values for plug-in hybrid electric vehicles. Early test results have already shown a general increase in CO₂ output across these extended test distances.

This update will affect not only newly released models from January 2025, but by the end of 2025, every PHEV sold in the UK will need to comply with the new standards.

With the introduction of the new Euro 6e-bis emissions standard, many company car drivers could see a sharp increase in their Benefit-in-Kind (BIK) tax rates.

To illustrate the impact of the new testing rules, consider a hypothetical example.

Under previous standards, a plug-in hybrid vehicle might have been rated at just 49g/km of CO₂, thanks to generous electric-only performance in lab tests. With an electric range between 70–129 miles, this would place the vehicle in a low 9% Benefit-in-Kind (BIK) band, attractive for company car drivers.

With the introduction of the Euro 6e-bis standards, however, real-world usage is now more accurately reflected. As a result, that same vehicle may now be rated at 85g/km of CO₂, placing it in a much higher 23% BIK band. This demonstrates how the new testing method can significantly affect how a vehicle is classified for tax purposes.

What does that mean in real terms?

Let’s say the vehicle has a P11D value of £40,000 and the driver is in the 40% tax bracket:

  • At 9% BIK, the monthly tax cost is £120.
  • At 23% BIK, it jumps to £306.67.

That’s an increase of £186.67 per month, or over £2,200 more per year.

With the new testing standards coming into place, fewer plug-in hybrid vehicles (PHEVs) may comply with company car policies, as many businesses set a maximum CO₂ emissions limit for vehicles in their fleet. As real-world emissions rise under the updated tests, some PHEVs may now exceed those limits, reducing the range of eligible models for company drivers.

Existing PHEV models must undergo re-homologation to comply with Euro 6e-bis standards by December 31, 2025. Fleet managers should be aware that vehicles produced after this date will be subject to the new CO₂ ratings, potentially impacting fleet emission profiles and associated costs.

The Euro 6e-bis-FCM standard is scheduled for implementation in 2027, bringing even more rigorous emissions testing to the automotive sector. One of the most significant changes will be the increase in the testing distance to 2,647 miles, a major step toward ensuring that emissions data more accurately reflects real-world driving conditions.

This extended testing is likely to result in higher reported CO₂ emissions values, especially for plug-in hybrid vehicles (PHEVs), which could directly impact Benefit-in-Kind (BIK) tax rates and vehicle eligibility for certain incentives.

The future of PHEV

As these future standards come into play, fleet managers and company car drivers should start factoring them into their decision-making now. Choosing future-ready vehicles could help avoid unexpected tax increases and support long-term cost efficiency.

However, fully electric vehicles continue to offer the greatest savings, thanks to significantly lower BIK rates, currently as low as 3%. As stricter PHEV testing takes effect, this could further encourage the shift toward EV adoption, highlighting the financial advantages of choosing a fully electric company car.