The electrification of company car fleets is lagging behind compared to private individuals. Especially in the largest automotive markets in Europe: France and Germany.
Companies are not playing along
According to a recent report by Transport & Environment, in Europe, electric cars accounted for “only” 14.1% of cars sold to companies, compared to 15.6% for private individuals in 2023. This is the third consecutive year that companies are behind consumers, even though they supposedly have the necessary resources to switch to electric vehicles and benefit from purchase incentives in some countries.
Within the European Union, 60% of new registrations are company cars. Therefore, companies have a major role to play in the ecological transition, and this includes the electrification of fleets. Company vehicles travel approximately twice as many kilometers as private vehicles. They are responsible for 74% of all emissions from new cars.
Fleets struggling to transition to electric
In France and Germany, companies are having trouble transitioning to electric vehicles. In Germany, the adoption rate of electric cars was 16.3% for companies compared to 25.6% for private individuals in 2023. In France, the adoption rate did not exceed 12% for professionals, compared to 22.1% for private individuals. Only Denmark has an even wider gap with 26.1% for companies compared to 53.1% for private individuals.
The study also shows that fleets register twice as many “large vehicles” (segments D, E, F, and G) as households. These models account for 12% of registrations in company fleets, compared to 5% for private individuals. This phenomenon is particularly evident in Germany. Our neighbors have registered 40% of all these vehicles within the European Union in the past year.
Volkswagen sells 70% of its cars to professionals
If fleets decided massively to switch to electric, this could be “an important driver to support the industrial transition of European car manufacturers,” notes the study. Sales of company cars account for the vast majority of deliveries at Volvo, Volkswagen, BMW, Stellantis, and Mercedes. At Volkswagen, 70% of car sales in Europe are company cars.
The Vatican electrifies its fleet // Photography: Volkswagen
The authors of the report also point out that companies are “more inclined than households to buy European electric cars.” Indeed, 76% of electric cars sold in fleets are European models, compared to 65% in the private market. To accelerate the transition of companies to electric, a new legislative framework could emerge at the European level.
What will the European Commission do?
According to Stef Cornelis, director of fleet programs at Transport & Environment, “the European Commission has a role to play. It must design the appropriate framework to make Europe a global leader in electrification.” According to him, this would provide “direction and assurances to European car manufacturers to continue increasing their investments in electric vehicle production.”
Given that companies are more naturally inclined towards European brands, it is our manufacturers (and not the Chinese) who could benefit from this potential regulatory framework. The opening of the public consultation on fleet electrification is an ideal opportunity for Europe. It is the perfect time to establish new regulations and rebalance between professionals and private individuals.
Transport & Environment specifically calls on the European Commission to “make a proposal for a regulation on professional vehicles by 2025, in order to set 100% electrification targets for large fleets and leasing companies by 2030.” The association also believes that member states must “reform taxation by incentivizing the adoption of electric vehicles through new taxes on traditional vehicles.”