Corporate cars falling behind in Europe’s Electric Vehicle adoption

A recent briefing by Transport & Environment (T&E) has highlighted a significant issue in Europe’s corporate car market, revealing that companies are falling behind private households in the adoption of battery electric vehicles (BEVs). Despite the corporate sector accounting for 60% of new car registrations in the EU, it is not leading the charge towards greener transportation, contrary to expectations.
Bar chart titled "In 73% of the BEV market in Europe, companies lag behind private households." It shows the percentage difference between corporate and private BEV uptake across various EU countries.
Source: Transport & Environment

Corporate Cars: A Major Market and Polluter

Corporate cars dominate the EU’s car market, with six out of ten new car registrations falling under this category. These vehicles typically drive twice as much as private cars, making them significant contributors to CO2 emissions. Additionally, corporate cars have a shorter ownership period, entering the second-hand market quickly and providing more affordable electric cars for households. Despite these advantages, corporate fleets remain heavily reliant on internal combustion engine (ICE) vehicles and plug-in hybrid electric vehicles (PHEVs), which have proven to be less eco-friendly than initially thought. PHEVs, often dubbed as “fake electric cars,” emit three times more CO2 in real-world conditions than their official values suggest.

Disparities in Electrification Efforts

For the third consecutive year, the corporate sector’s uptake of zero-emission vehicles (ZEVs) is lower than that of private households. In 2023, only 14.1% of new corporate car registrations were BEVs compared to 15.6% for private buyers. This trend is particularly pronounced in the bloc’s largest markets, which account for 73% of all new BEVs in the EU. In these key regions, corporations are noticeably lagging behind private households in adopting electric vehicles. In contrast, smaller markets, representing 27% of new BEV registrations, show better corporate participation in the shift to electrification. Notably, countries like Belgium and Luxembourg lead in corporate electrification, while Germany and France lag significantly behind.

Higher Emissions and Heavy Vehicles

Corporate fleets are not only slower in adopting BEVs but also contribute disproportionately to emissions. They register double the number of large SUVs compared to private buyers and have higher average CO2 emissions. In 2023, corporate cars had an average CO2 emission of 137 gCO2/km, higher than the 131 gCO2/km for private vehicles. The preference for heavier vehicles, such as large SUVs, exacerbates this issue. In Sweden, nearly half of the corporate ICE and PHEV registrations are large SUVs or passenger cars, compared to only one in four in the private sector.

Bar chart showing that corporate cars are the main driver of new car sales for European OEMs.
Source: Transport & Environment

The Industrial Opportunity

Accelerating the electrification of corporate fleets presents a significant opportunity for European carmakers. European manufacturers, such as Volvo, Volkswagen, and BMW, sell more vehicles to corporate customers than their non-EU competitors. Moreover, corporate buyers are more inclined to purchase European brands for their ZEVs, suggesting that increased corporate electrification could benefit the EU automotive industry, boosting demand for ZEVs and ensuring investment stability for the sector. According to T&E’s analysis, 76% of ZEV sales in the corporate market are of European brands, compared to 65% in the private market.

Policy Recommendations

To address this imbalance, T&E has put forward several policy recommendations for the European Commission and member states:

  1. Binding ZEV Targets: The new European Commission should introduce a Corporate Fleets Regulation mandating 100% ZEV registrations for large fleets and leasing companies by 2030. This regulation should be proposed within the first 100 days of the new Commission’s mandate.
  2. Made-in-Europe Clause: This regulation should promote domestic manufacturing by excluding non-EU made ZEVs from corporate tax breaks. This aligns with the goals of the Net Zero Industry Act.
  3. Tax Reform: National governments should overhaul corporate car taxation, increasing the tax burden on diesel, petrol, and PHEV vehicles to incentivise the uptake of zero-emission vehicles. Successful examples of such reforms include Portugal’s benefit-in-kind adjustments and Belgium’s depreciation write-offs, which have significantly boosted ZEV sales.



Despite significant financial advantages and a pivotal role in new car registrations, corporate fleets have not yet taken the lead in Europe’s transition to zero-emission transport. The T&E report underscores the need for stronger policy measures to unlock the environmental and industrial potential of corporate car fleets. By implementing the recommended policies, the EU can not only reduce greenhouse gas emissions but also bolster its automotive industry’s competitiveness on the global stage.

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