Electric Light Commercial Vehicles: Europe’s next industrial test

Electric LCVs are reaching a tipping point: their market share in the EU reached 11% in 2025 and registrations grew by 68% in a single year. Buyers now have access to more electric models than conventional ones (61 vs. 54), while electric vans can already offer up to 14% lower total ownership costs than diesel equivalents.

At the same time, competition is intensifying. Chinese manufacturers are expected to account for 18 of the 64 electric van models available in Europe by 2027, while already narrowing the price gap with European competitors to as little as 3%. European manufacturers have underinvested in the transition, with dedicated EV platforms accounting for just 18% of their electric van production in 2025, compared with 49% in China, limiting their ability to compete on cost and performance.

The industry demands to delay the electric van transition directly conflict with Europe’s industrial and climate objectives. Our analysis shows that the current CO₂ trajectory is within reach and does not justify any further weakening of the ambition. Maintaining ambitious CO₂ standards, combined with public support for electric LCVs produced in Europe under Article 4 of the Clean Corporate Vehicles Regulation, could make the EU a global leader in electric van manufacturing, surpassing 40% electric production by 2030.

Large companies' LCV fleets have an essential role to play in the transition. While they account for 55% of new LCV registrations, they purchase 75% of electric LCVs. The Clean Corporate Vehicles Regulation is a step in the right direction, but its proposed targets, 37% electric sales in 2030 and 80% in 2035, remain less ambitious than the trajectory required under the CO₂ standards.

Key recommendations for EU policymakers:

LCVs, and especially vans, are a typically European vehicle segment. According to ACEA data, 1.4 million vans were registered in the EU in 2025, making it the largest van market in the world. Demand is concentrated in a few major markets: France and Germany alone account for 43% of the European market, with France representing 25% of LCVs registrations in 2025 and Germany 18%. Italy and Spain follow with 13% each.

The transition of light commercial vehicles to electric is essential for the climate and for air quality. According to the Joint Research Center's 2023 Integrated Database of the European Energy System, LCVs account for 13% of road transport greenhouse gas emissions in the EU and contribute significantly to air and noise pollution, especially in cities. Despite progress in recent years, the decarbonisation of LCVs remains slower than that of cars, and the fleet is still overwhelmingly dependent on diesel.

Electrification levels still vary significantly across Member States. Nordic countries are leading the transition: ACEA data shows electrically chargeable vans accounted for 32% of new LCV sales in Denmark and 29% in Sweden in 2025. This clearly demonstrates that a rapid transition to electric LCVs is possible. Countries that have traditionally lagged behind in charging infrastructure deployment, such as Italy and Spain, record low levels of electrification, at 5% and 9%, respectively, in 2025. The largest markets, France and Germany, at 11% in 2025, sit between these two groups.

Overall, electric LCVs represented 11% of the European market in 2025 and 12% in the first quarter of 2026. The trend is now very positive for electric LCVs: their registrations increased by 68% between 2024 and 2025. This momentum is expected to continue in 2026. Germany recorded an impressive 83% increase in electric LCV sales in Q1 2026 compared with Q1 2025. France has significantly increased purchase support for electric LCVs in its “electrification plan” in June 2026. The Spanish EV purchase aid scheme “Programa Auto+” covers LCVs and is expected to come into force in summer 2026.

The technological case for LCV and especially van electrification is now firmly established. Suitable electric models are available for the overwhelming majority of use cases, offering businesses a credible pathway to reduce both operating costs and emissions. The analysis of the GlobalData Hybrid and Electric Vehicles Sales Forecast shows that, since 2026, van buyers have had more electric models to choose from than conventional models: 61 battery electric models compared with 54 models with a combustion or hybrid powertrain.

Vans are a major industrial asset for the EU, with 25 factories producing vans across the continent. Europe produced nearly 1.9 million vans in 2025, mainly in France, Spain and Poland, which accounted for 26%, 24% and 17%, respectively, of total EU production. The European van industry supports a significant number of industrial jobs across assembly, components, maintenance and aftersales.

European manufacturers remain strongly established in their home market, accounting for 77% of new van sales in Europe in 2025. However, as China rapidly scales up domestic electric van production, Chinese OEMs are increasingly turning their attention to the European market. According to recent announcements and the GlobalData sales forecast, 18 of the 64 electric van models expected to be available in Europe by 2027 would be Chinese.

The CO₂ standards for LCVs are the key instrument to stimulate industrial investment, increase production volumes and support the development of dedicated electric platforms. Weakening this trajectory would be a gift to Chinese OEMs. It would result in reduced competitiveness of European electric models precisely at the moment when Chinese manufacturers are preparing to enter the European market. It would also undermine pioneering European initiatives, such as the Flexis joint venture between Renault, Volvo, and CMA CGM, which have invested heavily in developing these purpose-built electric vans.

The European Commission has already made several concessions to the automotive industry in its December 2025 automotive package, including a reduction of the 2035 target from 100% to 90% (with a requirement for OEMs to “offset” these emissions through the use of green steel and alternative fuels) as well as a three-year averaging mechanism and a weakening of the 2030 target from 50% to 40%.

Yet ACEA continues to claim that the targets are out of reach and is calling for a broad set of additional flexibilities: a further reduction of the 2035 target to 80% and of the 2030 target to 35%, a four-year averaging of the 2030 and 2025 targets, a freeze of the utility factor used to calculate PHEV emissions, and the creation of a “carbon neutral fuel” category that would allow vehicles running on biofuels and e-fuels to be counted as zero-emission. These would break market momentum: our analysis shows that ACEA’s flexibilities would result in only 19% electric LCV sales in 2027, 27% in 2030 and 61% in 2035. To model ACEA's requests, we assumed a 20% share of LCVs running exclusively on eligible fuels in 2035.

Independent projections based on GlobalData’s database challenge this simplified narrative. Rather than pointing to an unfeasible transition pathway, the data suggests that the CO₂ trajectory for LCVs is within reach.

The LCV market is overwhelmingly driven by businesses, which account for 91% of new registrations. Large companies (those with at least two of the three following criteria: balance sheet total of €25M; net turnover of €50M; or >250 employees) alone represent around 45% of new LCV sales. They are also best positioned to lead the transition to electric mobility, and are already doing so: around 75% of electric LCVs are registered by large companies.

The leading role of large companies in the electrification of their fleets reflects several structural advantages that also make electrification a strong business opportunity. First, large companies are better able to absorb the higher upfront cost of electric LCVs while benefiting from lower operating costs over their lifetime. Second, their scale makes it easier to deploy charging solutions, whether through depot charging infrastructure or support for employee at-home charging. Third, they typically have dedicated fleet management teams capable of planning and managing the transition, including identifying suitable use cases for electrification, assessing total cost of ownership, deploying charging infrastructure, training drivers and adapting operational practices.

The electrification of large companies' van fleets also benefits the wider market. According to a survey we conducted in 2021, large companies replace their vans after an average of five years, after which these vehicles enter the second-hand market, the primary source of vans for artisans, SMEs and private households. Accelerating electrification of large companies' fleets is therefore one of the most effective ways to expand access to affordable electric LCVs across the broader economy.

As part of the Automotive Package presented in December 2025, the European Commission proposed a Clean Corporate Vehicles Regulation to boost demand for electric cars and LCVs. The proposal sets binding targets for Member States, not direct obligations on companies, requiring a minimum share of new company vehicle registrations to be zero- and low-emission vehicles in 2030 and 2035, with a specific sub-target for zero-emission vehicles. The scope is limited to large companies as defined above. Member States retain full flexibility on how to meet these targets, including through fiscal reforms, purchase subsidies, tax incentives or procurement rules.

Member State targets vary according to GDP per capita. According to T&E's analysis, the proposed targets would collectively amount to an EU-wide requirement for 41% zero- and low-emission vehicles by 2030, of which at least 37% would need to be zero-emission vehicles. In 2035, the proposed targets would result in zero- and low-emission vehicles accounting for 89 % of large fleets, of which at least 80% would need to be zero-emission vehicles. Low-emission LCVs are defined as LCVs with tailpipe emissions from 1 to 50 g CO₂/km, in accordance with Regulation (EU) 2019/631. Typically, low-emission vehicles are Plug-In Hybrid Vehicles (PHEVs).

This ambition level is insufficient: it would simply ask big companies to follow business as usual or track the market average, when they should be leading it. Abandoning the objective of making large companies' van fleets leaders of the energy transition would instead shift the burden onto SMEs, which have a lower financial and operational capacity to reach similar electrification levels in the short term.

While the targets need improvement, Article 4 of the Clean Corporate Vehicles Regulation establishes an important principle: public support should be reserved for electric LCVs. Given their non-existent to very limited benefits, plug-in hybrid LCVs should not be eligible to receive such support

This principle would encourage Member States to reform LCV taxation and subsidies, giving companies a clear signal that public money will support truly clean technologies. This is particularly important because businesses need visibility: fleet decisions are planned years in advance, and companies need to know which technologies will be supported by public policy.

Article 4 also includes an industrial dimension: only vehicles produced in Europe (as to be defined under the Industrial Accelerator Act) should be eligible for public support. This matters: it ensures that demand-side policies do not simply subsidise imported vehicles, leading to capital drain of European taxpayers’ money, but instead help build a European electric van industrial base. Europe is particularly well positioned to become a major production hub for electric vans, with countries such as Poland, Spain and France expected to play a leading role. For example, by 2030, 47% of van production in Poland is expected to be electric, 40% in Spain and 46% in France.