L’histoire se répète

Stef Cornelis — June 24, 2024

Is the leasing sector stalling progress on electrification in France?


It’s an inconvenient truth, especially for a piece in a fleet magazine, but the company car market in France has been a climate sinner for years in a row. In 2023, 12% of new corporate cars were electric, compared to 23% for private households. Quite the opposite of my own country Belgium, where EV uptake in the corporate market is miles ahead.

A sector that has more financial resources than private individuals and is benefiting from tax perks such as write-offs should be leading the charge on EVs. There also has social repercussions, since this lack of progress by companies holds back the supply of electric cars on the second-hand market, making them cheaper and more accessible to families in France. The slow uptake of EVs in the company car sector is a clear sign that the market in France is not delivering and policy measures are needed to correct this imbalance.

Damien Adam, a member of the French Assemblée and Renaissance Group, decided to do something about this. He tabled a law reform to help accelerate company car electrification in France by setting binding EV targets for large fleets: from 20% in 2025 increasing to 90% in 2032. A realistic and even conservative trajectory given that by 2035 every new car in Europe needs to be electric.

The role of the two giants

One sector that would be affected strongly - if not the most - by this law are leasing companies who account for 63% of all new corporate cars in France. The two biggest players are Société Générale/Ayvens and BNP Paribas/Arval, representing 18% and 16% of the corporate leasing market. Both love to flaunt their green credentials, underlining their role in electrifying the car sector.

But upon closer inspection, we see a different picture. Last year the leasing branches of Société Générale and BNP Paribas only registered 11% and 12% electric vehicles, far behind private households (23%) and the market average (17%).

Legislative push back

Not only do they go slow on electric in France, in the past weeks the leasing sector has been fiercely pushing back against the Loi Adam using all the available tools in the box. First, SesamLLD - France’s largest leasing association - went to court asking to exclude the sector from the scope of the law. Nice try, but the judge didn’t fall for it. But they didn’t stop there, tabling multiple amendments in parliament against Damien Adam’s reform while at the same time, asking ministries to water down the targets.

Looking at the very realistic trajectory of the proposed reform (90% by 2032), it is hard for me to find any rational reason why these leasing giants are so opposed. It seems that - very similar to carmakers ten years ago or the oil industry - the pushback of the leasing sector is almost an automated response, rooted in conservatism and refusing any climate targets out of principle.

A few months ago I talked to a big leasing company in France. During this conversation I finally heard something positive - that I thought was obvious: ‘we see EV leasing as an opportunity, not a risk’. And indeed, why not? Electrification offers multiple opportunities to create new services and revenue streams. Think for example about charging infrastructure deployment or battery state of health monitoring. Also this law would actually provide investment certainty and a clear trajectory for the leasing companies to plan their shift towards 100% electric.

The way forward

The coming months the debate on the Loi Adam will continue in and outside the Assemblée. The law is a major opportunity to accelerate the much needed shift to electric cars and reducing transport emissions. France will not meet its climate targets unless all parties do their fair share, including the leasing sector. Therefore it would be refreshing to hear Ayvens or Arval in the next months not going on about unstable EV residual values, or rejecting climate targets by default but taking a more solutions-oriented attitude. This means accepting an electrification target set by the French government or the European Commission and start a discussion on how we can get there. This would mean true and credible green leadership. We as Transport & Environment are more than open to have this discussion in France and in Brussels.

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