Summary
- EU’s corporate car market stagnation due to poor progress in fleet electrification in Germany, France, Italy, and Spain
- Corporate sector lags behind private households in electrification with only 12.4% of new registrations being BEVs compared to 13.8% in the private sector
- BEV uptake in corporate markets of France, Spain, and Italy decreased in H1 2024 compared to H1 2023
- Belgium is leading the shift to electric in the company car market due to fiscal changes phasing out tax cuts for fossil fuel company cars
- European Commission should ensure companies lead the shift to green transport to meet goals of the European Green Deal, possibly setting targets for large companies and considering an internal combustion engine phaseout by 2035
Article
The EU’s corporate car market is experiencing stagnation due to poor progress in the electrification of fleets in countries such as Germany, France, Italy, and Spain. While 13.8% of new private registrations in the EU were battery-electric vehicles (BEVs), only 12.4% of corporate registrations were BEVs. This lack of electrification in the corporate sector is hindering the overall progress towards electrification in the automotive ecosystem, as 60% of all new cars in the EU are registered by companies.
In countries like France, Spain, and Italy, the uptake of BEVs in the corporate market decreased in the first half of 2024 compared to the previous year, while the private segment saw an increase. In Germany, the corporate market continues to lag behind the private sector, with the latter being impacted by the phase-out of purchase subsidies for private buyers. Similarly, in Poland, the company car market stagnated compared to the first half of 2023, while private registrations decreased.
Belgium stands out as the only country where the company car market is leading the shift to electric vehicles, primarily due to fiscal changes that phased out tax cuts for fossil fuel company cars. Company cars are a significant perk for employees, and businesses have the financial means to invest in green technology like EVs, leading them to be at the forefront of the transition to electric vehicles. However, the slow progress of the corporate sector in adopting EVs indicates a market failure that requires intervention.
The new European Commission, under von der Leyen’s Political Guidelines, aims to meet the goals set out in the European Green Deal, including reducing transport emissions and electrifying road transport. The Commission should ensure that companies take responsibility and lead the shift to green transport, especially considering the tax cuts and financial benefits that corporate cars receive. Intervention from the EC is not only needed but also justified, given the lack of progress in the corporate sector over the past three years.
According to Stef Cornelis, fleets director at T&E, the EU should continue to boost EV demand by setting targets for big companies and phasing out internal combustion engines by 2035. He suggests that by 2030, large companies in Europe should only be allowed to purchase or lease battery electric cars. This would create clarity and encourage companies to accelerate the transition to electric vehicles. The European Commission’s intervention is crucial to ensure the success of the shift to green transport in the corporate sector.
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