The T4 Recharge Plug-in Hybrid is available in the sporty-looking R-Design or more luxurious Inscription model grades and has been strategically priced below £40,000 barrier to avoid being liable for the additional £325 per year Vehicle Excise Duty which more expensive cars attract in years two to six.
The more powerful T5 has more power for not much more money (it's an extra £1,900 to move from T4 to T5) but you'll also end up forking out for the additional road tax for five years.
Standard kit includes 19-inch alloys, leather seats (leather and artificial suede for the R-Design), lane keep assist, a 12.3-inch display for the dials, a nine-inch touchscreen and LED headlights. There’s a Pro version of each for an extra £1,400 (for the R-Design or £1,000 for the Inscription) which adds a few extras gizmos and for the Inscription Pro you get a very bling Orrefors crystal for the gear lever. But no matter which model you go for you’ll still have to fork out £300 for Apple CarPlay and Android Auto, £200 for wireless phone charging and £50 for a Type 2 charging cable. You can even go for orange carpets for £175 which we think look fantastic.
The T5 Recharge Plug-In Hybrid is some £8,000 more than the non-plug-in hybrid equivalent, the XC40 T3, which uses the same engine. That’s a hefty amount of cash so you have to make sure you have the right lifestyle for the PHEV version and you charge it up as regularly as possible to benefit from cheaper running costs. Volvo claims 135mpg which you’ll only achieve if you plug it in as often as possible and you drive very carefully. The main reason why you’d spend the extra £8,000 is if you’re a company car driver as the PHEV sits in the 12% Benefit in Kind (BiK) bracket – some 20% under the next best XC40 – thanks to Recharge emitting just 47g/km of CO2. Since all T5 XC40 PHEVs are priced over £40,000, you'll be lumbered with a hefty road tax bill for a few years.