A Swedish government inquiry wants to phase out the company car tax discount for electric cars and plug in hybrids, with the benefit gone completely for cars registered from 1 January 2031. The proposal is part of the wide ranging inquiry Vägen mot utfasning (SOU 2026:33), and the consultation period closes on 30 October.
What the inquiry proposes
In Sweden, a company car that can be used privately is taxed as a benefit in kind. The benefit value is not an amount the employee pays. It is the basis for the employee’s income tax. Under current rules, the new car price used in the calculation is cut by a fixed sum for chargeable cars: 350,000 kronor for electric cars and 140,000 kronor for plug in hybrids.
The inquiry wants to reduce this in steps. For cars first registered from 1 January 2028, the cut would fall to 200,000 kronor for electric cars and 75,000 kronor for plug in hybrids. It would drop to 150,000 and 50,000 kronor from 2029, then to 100,000 and 25,000 kronor from 2030, and disappear for cars registered from 2031. The reduction could also never exceed 40 percent of the car’s new price, against 50 percent today.
For drivers the change would be noticeable. Swedish outlet Dagens PS calculated that a BMW iX3 registered in 2028 would cost the driver 921 kronor more per month under the proposal.
Why the inquiry wants it gone
The inquiry argues that an electric car is now cheaper to own than a combustion car, even if it costs more to buy, and that the price gap is smaller than when the discount was introduced. Vi Bilägare gives an example: an electric Audi A6 costs about 60,000 kronor more than the diesel version, yet the taxable benefit value is 350,000 kronor lower.
Cost and fairness are the other arguments. The inquiry estimates the discount costs the state 5.6 billion kronor a year and says company car users are favoured over private buyers, even when the new electric car premium is taken into account. A 2023 study from the research institute VTI points the same way. It linked Sweden’s company car rules in general to roughly 80,000 extra cars and found that about 80 percent of company cars are driven by men.
Industry warns of a knock on effect for private buyers
The industry body Mobility Sweden, which represents carmakers and importers, strongly opposes the plan. Its chief executive, Mattias Bergman, describes it as a heavy blow to electrification and says the company car market is the engine of the transition. Nearly four in ten new cars registered to companies are already electric.
The organisation’s main argument concerns private households. Cars sold to companies later reach the private market as used cars, so a strong company market means more modern electric cars at lower prices for ordinary households. Remove the discount, the argument goes, and that supply could dry up.
The environment agency wants plug in hybrids to go first
Not everyone defends the discount. Naturvårdsverket, the Swedish Environmental Protection Agency, wants the discount for plug in hybrids to end as soon as possible rather than in steps. Its reasoning is that real world fuel consumption in some cases can be as high as in ordinary petrol cars, so the state should not subsidise vehicles whose emissions are only marginally lower. The agency also agrees with the inquiry that people with access to a company car are financially favoured over other electric car buyers.
A market that still trails its neighbours
The timing matters for the Swedish market. In the first half of 2026, electric cars took 41.5 percent of new registrations and plug in hybrids 24.6 percent, according to Mobility Sweden, so about two in three new cars were chargeable. Recent figures show Denmark at around 80 percent electric, Norway at around 98 percent and Finland at around 53 percent.
Private buyers have less support than company car users. The old private bonus is gone, and the new electric car premium, open since 18 March 2026, is aimed at lower income rural households with limited public transport. It pays up to 46,800 kronor over three years, and the Environmental Protection Agency estimated that about 800,000 households qualify.
What happens next
This is a proposal, not a law. The government will weigh the consultation responses before deciding whether to put anything to parliament, and the inquiry’s timetable assumes new rules from 1 January 2028. The political backdrop is unsettled after a tight September election, and company car drivers are an important voter group. The government has also previously rejected another proposal from the same inquiry, a higher reduction obligation that would raise fuel prices.
The inquiry also proposes a longer and stricter malus period for petrol and diesel cars, which the Swedish Transport Agency supports, although it rejects the 2028 start date. Together, the proposals would raise costs for combustion car owners while making electric company cars more expensive to run.
