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The European car industry is in the midst of a historical transition shifting to electric vehicle (EV) manufacturing. New challenges arise, such as Chinese competition or ensuring a predictable demand. To build a resilient automotive industry, the EU needs to introduce measures that strengthen demand for electric cars that are produced in Europe.
Company cars - which represent 60% of new vehicles - have large potential to boost EV demand. Although company car drivers receive large tax breaks when leasing an EV, this market is not outpacing the private segment. In Europe’s two biggest markets — Germany and France — the corporate market is even lagging behind.
The European Commission has now announced it will come forward with a legislative proposal to accelerate the electrification of corporate fleets. An EU electrification target for large company car fleets would guarantee a market demand for European carmakers of more than 2.1 million EVs in 2030. This would deliver on average half of the EVs they need to sell to meet their 2030 CO₂ emission standards and avoid paying penalties.
Key findings:
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1
It would specially benefit EU carmakers. Corporate cars are Europe’s biggest automotive market: Today almost 60% of new cars in the EU are registered by companies. European carmakers - who have headquarters in the EU - have a stronger presence in this market than their competitors. On average 62% of their sales go into this segment compared to only 49% for non-EU carmakers. Moreover, data also shows that when buying electric cars, companies are more loyal to EU brands than private consumers.
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2
Benefits for EU carmakers could be even bigger if the European Commission develops a vehicle eco-score mirroring the French ecobonus. This EU eco-score should become a rating system that rewards the production of vehicles using low-carbon materials, while promoting energy and resource efficiency. As a result, vehicles made in Europe would be better rated thanks to cleaner energy used in the manufacturing process.
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Given the much shorter ownership period of corporate cars (three to four years), the electrification of these cars will rapidly accelerate the supply of more affordable second-hand ZEVs for private buyers. By requiring large companies to only register electric vehicles from 2030 (see section 2), nearly seven million families will have access to more affordable used EVs by 2035.
Policy recommendations:
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As part of the Clean Industrial Deal and the upcoming Automotive Industrial Action Plan, the European Commission should announce a regulation on Greening Corporate Fleets. Directives take too long to implement and will not provide the timely market signal and predictable demand that we need already in the next years. A proposal should be tabled latest in Q1 2026.
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This Regulation can be done simple and effective: The European Commission should set a binding 100% ZEV target for large corporate fleets (new cars as of 2030). The market data in France show that fleets with 100 cars or more can be a good threshold striking a balance between efficiency (less than 1% of holdings) and effectiveness (21% of all new registrations). The upcoming impact assessment should provide more granular data to assess the suitable threshold.
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The European Commission should announce a vehicle “eco-score” initiative as part of its Action Plan for the automotive industry, and prioritise the development of the methodology in 2025-6. This EU eco-score should be applied to an upcoming Greening Corporate Fleets Law, for example by introducing a sub-target for corporate cars that need to meet a certain EU eco-score level.
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This EU Greening Corporate Fleets Regulation should go beyond cars and also set ZEV targets for large shippers and freight forwarders to boost demand for zero emission vans and trucks. Shippers and freight forwarders were not part of the public consultation and should therefore be included in the upcoming EC impact assessment.
To find out more, download the briefing.
