It simply doesn't attract the additional taxes, as the T5 does.

Volvo XC40 Recharge T5 plug-in hybrid is getting an additional entry-level T4 option in the UK, to bump sales up a little bit more in a smart way.

It has slightly less power from the internal combustion engine - 95 kWh instead of 132 kW (probably simply through a software limit) and a sub-£40,000 price tag, which allows it to avoid the £325 Vehicle Excise Duty surcharge.

"This efficiency underpins the XC40 Recharge T4's low day-to-day running costs, while sub-£40,000 on-the-road prices mean it doesn't attract the additional £325 Vehicle Excise Duty payable from years two to six. For business motorists, the low CO2 emissions further attract competitive benefit-in-kind rates for company car tax. A rate of just 12% means a 20% taxpayer would pay as little as £78 a month.

The new powertrain joins the established Recharge Plug-in Hybrid T5 in the XC40 range and is available in R-Design and Inscription equipment grades, with front-wheel drive. Respective on-the-road prices are £39,130 and £39,475."

In terms of battery capacity (8.5 kWh usable and 10.7 kWh total) and all-electric range (up to 27 miles / 43 km WLTP), it's still the same good old XC40 PHEV. Only the acceleration is slower - 0-100 km/h (62 mph) in 8.5 seconds instead of 7.3 seconds.

Join owners and enthusiasts discussing the Volvo XC 40 Recharge at InsideEVsForum.com!

First deliveries are scheduled in the UK from October 2020, while in Q1 2021 the first XC40 BEVs will arrive.

Gallery: Volvo XC40 Recharge Plug-in Hybrid

Volvo XC40 Recharge Plug-in Hybrid specs:

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