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

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Electrification within the firm automobile market lags behind — notably in Europe’s greatest automobile markets France and Germany, a brand new report by inexperienced group Transport & Setting (T&E) finds.

The corporate automobile market lagged behind on electrification once more final 12 months with battery electrical automobiles accounting for 14.1% of company gross sales, while the non-public market was at 15.6%, a brand new report finds. For the third 12 months in a row, corporations are falling behind, regardless of having the monetary assets to make the swap to EVs and likewise benefiting from beneficiant tax cuts. Within the EU, six out of 10 new registrations are firm automobiles. As a result of they drive twice as many kilometers as non-public automobiles, they account for 74% of all new automobile emissions.

Germany and France, which mixed account for over half of recent BEV registrations within the EU, present the biggest disparities between the company channel and personal households. In Germany, company BEV uptake is at 16.3%, considerably under the non-public sector’s 25.6%. In France, the uptakes are 12% and 22.1% respectively. These disparities are solely exceeded by Denmark, the place company BEV uptake is lagging the non-public market by an enormous 27 proportion factors (26.1% in comparison with 53.1%).

Firms registered twice as many giant automobiles (automobiles of segments D, E, F and G) as non-public households final 12 months (12% of recent registrations versus 5%), the examine additionally finds. This phenomenon is especially accentuated in Germany: as Europe’s largest automobile market, Germany accounted for 40% of all heavy automobiles registered throughout the EU.

Firms are additionally driving the uptake of plug-in hybrid automobiles in Europe – automobiles which have been confirmed repeatedly to be equally as polluting as petrol automobiles. In 2023, 77% of all new PHEVs registered have been within the company 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 electrical fleets programme at T&E.

Company automobiles might emerge as a significant driver in supporting the inexperienced industrial transition of European carmakers, the examine finds. The company automobile market is chargeable for the overwhelming majority of automobile gross sales of 5 of Europe’s foremost automobile producers (Volvo, Volkswagen, BMW, Stellantis and Mercedes-Benz). 70% of VW’s automobile gross sales within the EU are firm automobiles. On common, solely 49% of gross sales of non-European automobile makers go to the company section.

Firm automobile drivers even have a better tendency over non-public households to purchase European electrical automobiles, the information exhibits. 76% of zero-emission automobiles within the company market are offered by European producers, in comparison with 65% within the non-public market. Accelerating the electrification of company fleets might be extra useful for European carmakers than their opponents, 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 significant legislative alternative to rectify the imbalance in EV uptake within the company channel, with the opening of the public consultation on greening corporate fleets. T&E calls upon the brand new European Fee to make a proposal for a Company Fleets Regulation in 2025 that units 100% electrification targets for big fleets and leasing corporations by 2030. Member states also needs to reform company automobile taxation, incentivising the uptake of EVs by rising the tax burden on polluting diesel, petrol and plug-in automobiles.

Associated Publication: Unveiling Europe’s corporate car problem

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Article from Transport & Environment. Featured picture by CleanTechnica.