January 6, 2026
Sara Davies
Wessex Fleet Updates
As we enter 2026 with a flying start, our Director Simon Naylor reflects on the end of 2025, giving his expert opinion on what we might see in the fleet sector for the upcoming quarter…
Business gains continue to crystalise
2025 ushered in some of the most high-achieving months of over two decades in business. Clusters of key new contracts continued to crystalise as the year wound down in Q4. Compounding our success, we had a strong order take in December, driven by some public sector van orders from a leading southern university and a college in Central London.
Rental business up by 25%
Our business generated a rental spend of £3.9m last year through 150,000 rental days booked by our customers, equating to a 25% increase on 2024 figures.
Strong discounts on vehicles
Price improvements continued and we’re seeing strong discounts on vehicles moving into 2026, driven primarily by the Zero Emission Vehicle (ZEV) mandate, Chinese new entrants and stabilised supply chains.
The ZEV requires a rising percentage of manufacturer sales to be electric. To hit these targets and avoid heavy fines, manufacturers are offering deep discounts on electric vehicles (EVs), especially through leasing channels.
New manufacturers, particularly Chinese EV brands like BYD and Jaecoo, are entering the market with competitive pricing and high standard technology. Established brands have been forced into cut-throat levels of discounting to protect their market share.
Add to this, the fact that the supply chain constraints of previous years have eased; we’re seeing an influx of new vehicle stock.
Talking of the budget…
Prior to the budget, fleet and business customers delayed key purchasing decisions due to uncertainty over potential tax changes, particularly regarding electric vehicle (EV) incentives and fuel duty. Since the budget, the market has begun to “normalise,” with firms seeing an uptick in vehicle orders as they incorporate new tax assumptions into their long-term planning. The budget provided a roadmap that allowed firms to finalise procurement strategies.
The government allocated an additional £1.3 billion to extend the Electric Car Grant until 2030, offering up to £3,750 off eligible vehicles.
Benefit-in-Kind (BiK) rates for company cars were confirmed for the next two years, providing much-needed stability for leasing and salary sacrifice schemes.
A freeze on fuel duty until September 2026 was confirmed, offering temporary relief for internal combustion engine (ICE) fleets before staggered increases begin.
A new Electric Vehicle Excise Duty (eVED) was introduced, effective from April 2028, at 3p per mile for EVs and 1.5p per mile for hybrids, which firms are now factoring into their 2026-2028 replacement cycles.
Mixed government messages on EVs
The budget decisions that affect EVs have been viewed by some as creating mixed messaging on electrification. Rebates to help sales seem to have been tempered by the charge per mile at 3p for fully electric cars, in addition to the standard annual VED.
There are some concerns that the new taxes could undermine demand and hinder the UK’s goal of phasing out new petrol and diesel car sales by 2030. The plan for mileage capture doesn’t seem to have been thought out beyond the following:
- Drivers will initially estimate their annual mileage and pay upfront or in instalments through the existing DVLA system.
- Actual mileage will be checked annually, likely during the MOT test (for cars over three years old) or at the first and second anniversaries for newer cars, with a reconciliation process for any over or underpayments.
- The government has ruled out mandating telematics (tracking devices) to protect drivers’ privacy, though an opt-in option is being considered.
The contradiction of simultaneously encouraging and taxing EV ownership, is potentially making EVs less financially attractive especially for some high-mileage drivers, or at the very least introducing some ill-timed hesitation into the equation.
Simon’s top tips for 2026
I think there will continue to be strong manufacturer support on EVs this year. This will be driven by sales targets, but also by more and more manufacturers wanting to mark territory to new entrants. Chinese brands such as BYD, Omoda, Jaecoo and Chery, are all taking share from Tesla, VW, Audi, and other more traditional brands. The expectation is that manufacturers won’t cave in without a fight. With manufacturers pushing aggressive pricing, there are likely to be some very good deals out there for fleet managers to take advantage of. Will they be good enough to outweigh tax concerns? Looking at the deals we’re seeing on some electric vehicles already this year, they could well be.
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