Volvo charges less for XC40 PHEV 

Volvo has launched a new, cheaper version of its XC40 plug-in hybrid to slip below the £40,000 road tax barrier.  

The new T4 Recharge is available in R-Design and Inscription equipment grades, with front-wheel drive only and priced at £39,130 and £39,475 – a drop of £1,900 compared to the T5. 

The T4 uses a detuned version of Volvo’s 1.5-litre petrol engine and produces 127bhp compared to 178bhp for the T5. This stretches the 0-60mph time from 7.0 to 8.2 seconds. It uses the same 80bhp electric motor and 10.7kWh rechargeable lithium-ion battery to deliver an all-electric driving range of up to 27 miles, with an official CO2 emissions of 47g/km – identical figures to the T5. The benefit-in-kind rate for company car drivers of both models is 12%.

Importantly though, the T4’s sub-£40,000 on-the-road price means it doesn’t attract the additional £325 Vehicle Excise Duty payable from years two to six on more expensive cars. 

Read our full review of the XC40 here and watch Tom's video test here.