Company cars account for over half of new cars sold every year and, as they are driven more than private cars, are responsible for 73% of new-car emissions.
Full electrification of fleets is therefore a priority. It should happen EU-wide by 2030 at the latest—and by 2025 in countries with advanced EV markets already— to ensure their disproportionate environmental impact is tackled.
Why fleets matter
To achieve a zero emissions road transport system by 2050, all new cars, vans, smaller trucks and buses must be zero-emission no later than 2035. Today, six out of 10 cars sold in Europe are company cars, and 87% of those new registrations were still petrol and diesel vehicles in 2020.
Because fleets contribute disproportionately to road transport emissions and can be targeted with just a few simple measures, electrification of fleets represents the ‘low hanging fruit’ for governments and the EU alike in their efforts to decarbonise transport.
Prioritising fleet electrification will secure the biggest and fastest overall impact in CO2 reduction in the sector. The EU should set a clear roadmap that targets fleet electrification of 50% and 100% in 2025 and 2030 respectively. Certain member states who already have mature EV markets should set the earlier target of 2025.
Affordable zero-emission cars in the second-hand market
Crucially for the wider transition to electric cars, corporate vehicles enter the used car market quicker than private ones (typically after 3-5 years), so a continuous influx of relatively new and cheap zero-emission vehicles will be available to private buyers on the second-hand market thanks to corporate fleet electrification. Accelerating electrification of fleets means much faster and affordable penetration of zero-emission cars into the wider European car stock.
In terms of actual numbers, according to T&E calculations, 1.4 million EVs are expected to reach the second hand market in 2025 and 3.4 million in 2030, thus providing affordable EVs in almost-new condition for used car buyers. This is when a huge shift is expected in the private market, as the average “Jane and Joe” in Europe buys second-hand cars, not new ones.
Accelerating fleet electrification
Electrification of fleets can be achieved in part through national taxation reforms, but also by steering companies towards zero-emission fleets at the EU level, boosting EU-wide demand, strengthening investments and scaling up zero-emission vehicles production in the EU.
The corporate car market’s transition to zero-emission vehicles already makes economic sense and the shift will be profitable from a total cost of ownership perspective for fleets in Europe. Companies have a role to play in the transition by electrifying corporate fleets and should use the opportunity to lead the change. In fact, many companies have already committed to electrifying 100% of their fleets by 2030 as part of their broader sustainability strategies.
When leasing a car, is an EV or a diesel/petrol cheaper?
It’s time for leasing companies to tell consumers the Total Cost of Ownership
— Transport & Environment (@transenv) January 7, 2022
Europe must take the lead in achieving zero emissions mobility and honouring the commitments under the European Green Deal strategy, which includes a target of reducing transport-related greenhouse gas emissions by 90% by 2050.
To get emissions from the transport sector on a clear downward trend, the European Commission presented its Sustainable and Smart Mobility Strategy and confirmed it will “propose actions to boost the uptake of zero-emission vehicles in corporate and urban fleets”. Therefore, setting an ambitious roadmap at EU level to accelerate the shift to zero-emission fleets in companies, targeting 50% and 100% in 2025 and 2030 respectively, and adding earlier goals for certain countries that can reach 100% by 2025, will provide clarity to focus the efforts of all stakeholders to achieve these goals.
Charging infrastructure needs
While setting goals through policy and regulation can accelerate the pace of fleet electrification, EVs also need a reliable and ubiquitous charging network. As calculated by T&E (and confirmed by the European Commission), 3 million public charge points will be needed by 2030, at an estimated cost of €20bn, compared to only 213,000 public charge points that exist today.
Charging infrastructure is the key to accelerate fleet electrification. Deployment of on-street public infrastructure should be prioritised, together with city charging hubs including high-power charging stations, making charging simpler for taxis and private-hire vehicles. But a new “right to plug” legislation should also be implemented, so the permission of building owners in advance of installing charging points is not needed and overnight slow charging at home is also quickly and easily made available.
Harmonised, future-proof infrastructure is necessary to recharge the dozens of millions of EVs due to hit the roads this decade and finally curb the increasing trend in road transport emissions.