CAP has confirmed with the Treasury that the removal of the 3% diesel surcharge, announced by the Chancellor in last month's Budget , will apply to all registered diesel vehicles and not just those registered after April 2016.
This means that all diesel company car drivers will benefit, seeing a reduction in their BIK in 2016.
It is good news for company car drivers and means diesel cars will become even more popular in company car fleets, says CAP.
But for electric vehicles the move signals an end to their tax advantages and will do nothing to help the kind of fleet take-up necessary to create significant used market volumes.
Mark Norman, head of automotive intelligence services at CAP, said: "It is a welcome move by the Government to give a lead time of several years before introducing such a measure because it gives drivers the opportunity to order their next car, fully armed with information about the tax implications of their choice.
"It will also encourage manufacturers to continue their efforts to gain competitive advantage in the company car market by further reducing CO2.
"However, the hidden story here is perhaps the serious blow it represents to electric vehicles and other ultra-low carbon cars, with the removal of a significant advantage which will further constrain take-up.”