A proposed European Union law requiring large companies to electrify their vehicle fleets could generate 57 percent of the electric vehicle sales carmakers need to meet 2030 CO₂ reduction targets, according to new analysis by Transport and Environment.

The research argues that stronger fleet electrification rules would secure demand for approximately two million additional battery electric vehicles by 2030. However, this outcome depends on lawmakers raising the proposed electrification targets and excluding plug-in hybrid vehicles from eligibility.

Under the current European Commission proposal, large companies would be required to ensure that 45 percent of newly registered vehicles are electric on average across member states. Transport and Environment contends that this level would secure only 37 percent of the zero emission vehicle sales needed for manufacturers to meet their binding 2030 emissions targets.

Raising the Target to 69 Percent Alters Market Impact

The analysis models a higher electrification threshold of 69 percent for large company fleets, consistent with the medium ambition scenario outlined in the Commission’s own impact assessment. It also assumes that plug-in hybrids are excluded, thereby focusing exclusively on fully electric vehicles.

Under this scenario, the share of required electric vehicle sales secured through fleet demand would rise substantially. The study indicates that manufacturers such as BMW, Volkswagen, and Volvo would see between 59 percent and 72 percent of their necessary electric sales effectively guaranteed through fleet purchases.

Large companies represent only a small fraction of EU businesses by number but account for a significant share of new vehicle registrations. The Commission proposal defines large companies as those meeting at least two of three criteria related to turnover, balance sheet size, or workforce.

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Current Proposal May Reinforce Existing Market Gaps

Transport and Environment argues that the proposed 45 percent target would not require fleet operators to meaningfully outpace overall market electrification in most member states. According to the analysis, companies would be asked to electrify faster than the broader car market in only six countries, including Germany and the Netherlands.

In major markets such as Germany, the projected increase in fleet electrification under the proposal would be only marginally higher than expected overall market growth. In the majority of member states, corporate fleets would either match or lag overall electric vehicle adoption rates.

The organization suggests that without stronger targets, the legislation risks formalizing the fleet sector’s historically slower pace of electrification.

Fiscal Policy and Corporate Uptake

Evidence from national tax reforms illustrates how policy design influences corporate demand. Belgium revised its fiscal framework for company cars in 2021, phasing out depreciation write-offs for internal combustion vehicles and plug-in hybrids. By 2025, electric vehicles accounted for 54 percent of corporate registrations in Belgium.

In contrast, Germany, which did not introduce comparable tax penalties for combustion vehicles in the corporate segment, recorded a 19 percent electric share in the same market segment in 2025.

These contrasting outcomes highlight the role of fiscal and regulatory levers in shaping corporate procurement behavior.

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Industrial Implications for European Manufacturing

The research also links fleet electrification targets to domestic industrial policy. In 2025, 74 percent of corporate electric vehicles registered in the European Union were assembled within the EU. This share is higher than in the private consumer segment.

If eligibility for financial incentives is restricted to vehicles assembled in the European Union, as proposed in related regulatory measures, higher fleet targets could strengthen domestic manufacturing demand. Under a 69 percent electric-only target, the analysis estimates that European carmakers could sell up to 1.9 million additional EU-produced electric vehicles in 2030.

By comparison, maintaining the 45 percent target could limit the incremental production effect to approximately 1.2 million vehicles.

The definition of vehicles considered made in the European Union is expected to be clarified under the forthcoming Industrial Accelerator Act.

Policy Crossroads for 2030 Compliance

The EU’s 2030 emissions standards require manufacturers to reduce fleet emissions by 55 percent compared with 2021 levels. Carmakers have raised concerns about insufficient consumer demand for electric vehicles to meet these targets.

Transport and Environment’s analysis frames corporate fleet regulation as a potential demand stabilizer. By securing predictable, large-volume purchases from major companies, lawmakers could reduce uncertainty for manufacturers navigating the transition to zero emission vehicles.

The legislative process will determine whether the final fleet law becomes a limited compliance instrument or a central mechanism for aligning transport decarbonization, industrial competitiveness, and corporate procurement practices across the European Union.

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