The Government has said it will ‘consider the case for providing time-limited incentives through company car tax to encourage the purchase and development of ultra-low emission vehicles, while ensuring that all company cars are subject to a fair level of taxation’.

The u-turn has come about following the announcement in this year’s Budget of sharp hikes in BiK for cars with CO2 emissions of 95g/km and under from 2015/16.

In response, Darren Payne, sales director, Renault UK, said: ‘Renault welcomes the spirit of the move to reconsider BiK on ULEVs. However the details will be critical both in terms of the level of taxation proposed and the duration of any concession.’

He added: ‘We are firmly of the opinion that a zero rating is appropriate to stimulate uptake of EVs in particular, and that the Chancellor should take a long-term view on this dispensation to provide market certainty for fleet managers who are making policy decisions that reach beyond a single ownership period.’