All new fleet cars and vans should be EV by 2030 say Coca-Cola, SAP, IKEA, Tesco…

An earlier deadline for the electrification of company cars and vans would reduce carbon emissions, expand the secondhand EV market and improve Europe's energy security.

Major multi-national fleets are among a consortium of 30 organisations that have written an open letter to the European Commission, calling for all new company cars and vans to be electric by 2030.

An Post, AstraZeneca, Coca-Cola, Grundfos, IKEA, SAP, Tesco and Unilever are among the group calling for the ambitious new target, which is five years earlier than the 2035 deadline currently set for phasing out internal combustion engine vehicles.

The fleets are also proposing that all new heavy commercial vehicles should be zero emission by 2035, with binding purchase targets for fleets above a certain size.

Accelerate carbon savings

They argue that the electrification of Europe’s fleets represents a golden opportunity to quickly reduce emissions, boost the EU’s energy security and grow a second-hand market for affordable EVs.

With company cars not only accounting for six out of 10 new cars sold in Europe, but also typically driving significantly higher mileages than private cars, early electrification: “Would target millions of high-mileage vehicles, for which electrification would make a very valuable contribution to the EU’s climate goals under the European Green Deal,” says the letter.

Stef Cornelis, director of electric fleets at T&E, said: “Leading companies with large car fleets are committed to become leaders on electrification and the climate. For too long, corporate cars have not been on Europe's agenda. This has to change.”

Electrification challenges

Yet the electrification of vehicles is proving a financial and logistical challenge even for the most committed fleets. One of the hopes of the signatories to the letter is that an EU-wide mandate for all company cars and vans to be electric by 2030 will encourage manufacturers to invest earlier in scaling up the production of EVs.

Data from ACEA, the vehicle manufacturers association, show that last year battery electric cars accounted for a 12.1% market share in the EU, although the numbers for company cars are higher. Figures from Dataforce reveal that battery electric cars had a 14.7% share of the true fleet sector in 2022, while major leasing companies have reported even higher EV penetrations: 32% of LeasePlan's deliveries in Q4 2022 were electric; ALD said 35% of its current orders are electric; and 18.9% of Arval's fleet is already electric. 

The electrification of the light commercial vehicle sector, however, is significantly lower, with the most recent data from ACEA revealing that battery electric and plug-in hybrid power trains had only a 3% market share, and represent only 0.4% of vans on the road.

Fleet reaction

Przemysław Danielak, Central Europe Head of Transport and RSU, Tesco Technology Poland, told Fleet Europe: “The commitments that 30 companies, including Tesco, have made to switch to electric vehicles are facing difficulties because of high vehicle prices from manufacturers. We see a risk that if manufacturers keep prices at this level, electrification will not work out financially for us as businesses. We should start pushing manufacturers, because if electro mobility is the future, then certain steps have to be taken right now, because it requires changing vehicle production."

A combination of the pandemic and EV production and delivery delays have forced An Post, Ireland’s postal service, to backtrack on its goal to convert 2,000 of its 3,000-plus vehicles to electric by 2022. Its new commitment is to have 50% of its vehicles powered by non-diesel fuel sources by 2025.

And IKEA has set itself a goal of using electric or other zero-emission solutions for 100% of its customer deliveries and services by 2025. Last year it achieved 12% of these deliveries by zero emission vehicles.

European Parliament votes for 2035 ban on ICE

This week (February 14th) the European Parliament voted in favour of the European Commission’s ‘Fit for 55’ package, which sets a target of a 55% reduction in CO2 from cars and a 50% reduction for vans by 2030, compared to 2021, and a 100% reduction by 2035.

Rapporteur Jan Huitema (Renew, NL) said: “This regulation encourages the production of zero- and low-emission vehicles. These targets create clarity for the car industry and stimulate innovation and investments for car manufacturers. Purchasing and driving zero-emission cars will become cheaper for consumers and a second-hand market will emerge more quickly. It makes sustainable driving accessible to everyone.”

OEM reaction

ACEA said the European market is on course for 70% of new car sales to be battery electric by 2030, but has called on all EU policies and regulations to align with zero emission mobility. “All stakeholders must now urgently work together to guarantee access to the raw materials needed for e-mobility, make electric cars affordable mass-market products, mitigate negative employment consequences, and enable European citizens to charge their electric vehicle quickly and easily,” it said.