Heavy, Dirty, Tardy: Company Car Electrification Lagging Behind Private Market for 3rd Year in a Row – CleanTechnica

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!


Electrification in the company car market lags behind — particularly in Europe’s biggest car markets France and Germany, a new report by green group Transport & Environment (T&E) finds.

The company car market lagged behind on electrification again last year with battery electric vehicles accounting for 14.1% of corporate sales, whilst the private market was at 15.6%, a new report finds. For the third year in a row, companies are falling behind, despite having the financial resources to make the switch to EVs and also benefiting from generous tax cuts. In the EU, six out of 10 new registrations are company cars. Because they drive twice as many kilometers as private vehicles, they account for 74% of all new car emissions.

Germany and France, which combined account for over half of new BEV registrations in the EU, show the largest disparities between the corporate channel and private households. In Germany, corporate BEV uptake is at 16.3%, significantly below the private sector’s 25.6%. In France, the uptakes are 12% and 22.1% respectively. These disparities are only exceeded by Denmark, where corporate BEV uptake is lagging the private market by a massive 27 percentage points (26.1% compared to 53.1%).

Companies registered twice as many large cars (cars of segments D, E, F and G) as private households last year (12% of new registrations versus 5%), the study also finds. This phenomenon is particularly accentuated in Germany: as Europe’s largest car market, Germany accounted for 40% of all heavy cars registered across the EU.

Companies are also driving the uptake of plug-in hybrid cars in Europe – cars which have been proven time and again to be equally as polluting as petrol cars. In 2023, 77% of all new PHEVs registered were in the corporate channel.

“Companies have higher purchasing power, so they should be leading on the EV transition. Instead they lag behind households on electrification and register twice as many big cars. Meanwhile governments are subsidising company cars with generous tax exemptions. The market is not delivering and existing national incentives are not strong enough to turn the company car market into the green leader it is supposed to be. This is why EU action is not only justified but also much needed.” explains Stef Cornelis, director of the electric fleets programme at T&E.

Corporate cars could emerge as a major driver in supporting the green industrial transition of European carmakers, the study finds. The corporate car market is responsible for the overwhelming majority of car sales of five of Europe’s main car manufacturers (Volvo, Volkswagen, BMW, Stellantis and Mercedes-Benz). 70% of VW’s car sales in the EU are company cars. On average, only 49% of sales of non-European car makers go to the corporate segment.

Company car drivers also have a higher tendency over private households to buy European electric cars, the data shows. 76% of zero-emission cars in the corporate market are sold by European manufacturers, compared to 65% in the private market. Accelerating the electrification of corporate fleets will be more beneficial for European carmakers than their competitors, T&E explains.

“The European Commission needs to design the right framework to make Europe a global leader in electrification. This is where EV targets for corporate fleets come into play. This demand instrument will create predictability and provide certainty for European carmakers to continue to ramp up investments in EV and battery manufacturing. As European carmakers have a higher presence in the corporate market, they will benefit more from this measure than their non-EU competitors.” concludes Stef Cornelis.

Europe has a major legislative opportunity to rectify the imbalance in EV uptake in the corporate channel, with the opening of the public consultation on greening corporate fleets. T&E calls upon the new European Commission to make a proposal for a Corporate Fleets Regulation in 2025 that sets 100% electrification targets for large fleets and leasing companies by 2030. Member states should also reform corporate car taxation, incentivising the uptake of EVs by increasing the tax burden on polluting diesel, petrol and plug-in cars.

Related Publication: Unveiling Europe’s corporate car problem

Download Report PDF

Article from Transport & Environment. Featured image by CleanTechnica.


Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.


Latest CleanTechnica.TV Videos


Advertisement



 


CleanTechnica uses affiliate links. See our policy here.