Leading clean transport campaign group Transport & Environment have proposed some aggressive targets for transitioning fleets to electric vehicles.
Europe, like much of the world, is on a pathway towards 100% zero-emission vehicles, the question is how aggressively should they pursue this and what is the right set of policy positions to achieve that?
The European Commission is the executive branch of the European Union (EU), responsible for proposing legislation, implementing decisions, upholding the Union’s treaties, and managing the day-to-day business of the EU.
In Feburary 2024, the European Commission opened a public consultation on Greening Corporate Fleets and whether the EU should set mandatory ZEV targets for this market.
While the success of the EV transition to date has largely been individual vehicle sales to consumers, there’s an opportunity to accelerate the transition by targeting large fleets.
It is understood that as many as 60% of new cars are registered by companies, of which the majority are owned by large corporations, added to by commercial vehicles like vans and trucks.
In 2023, Germany and the Netherlands led the way, accounting for as much as 60% of all zero-emission truck sales, leaving much of the rest of the EU lagging behind.
The proposal
This proposal would see companies with more than 100 cars, be deemed a large company and be required to transition their fleets to EVs by 2030.
The transition of large fleets would seek a significant volume of second-hand EVs into the market once the fleet managers rotate them out at the end of a cycle (i.e. X amount of km/3 years).
It is estimated that as many as 8.2 million affordable EVs could be on the market by 2035, helping to address the largest issue with EVs – the cost.
Policy recommendations
1. Given the potential, the next European Commission should commit to presenting a Corporate Fleets Regulation within the first 100 days of its new mandate.
2. This Corporate Fleets Regulation should be simple and effective:
– Cars and vans: set binding 100% zero-emission purchase targets by 2030 for large car fleets (as of 100 vehicles, including leasing companies) and large van fleets. This should be combined with a fleet target, requiring fleets to make their entire stock zero emission by 2035.
– Trucks and coaches: set binding stock targets requiring big truck and coach fleets to largely replace their existing fleets with zero-emission vehicles by 2040 (e.g. 90% ZEV stock target). To help fleets ramp-up ZEV ownership, an intermediate 100% ZEV purchase target should be introduced by 2035, with some flexibility for companies to choose their own ramp-up pace.
– Extend the scope to big shippers and freight forwarders (vans and trucks): the binding ZEV targets should also apply to companies that operate or contract vehicles if their turnover surpasses €50 million. Mostly relying on subcontractors to move their goods, these big players should help carriers in their transition.
Promote made-in-EU: Include a made-in-Europe clause requiring member states to exclude non-EU-made ZEVs from corporate tax breaks and other incentives for zero-emission corporate vehicles (as done in the Net-Zero Industry Act).
This should kick in when a specific non-EU country accounts for a certain percentage of EU sales and provided that the price difference is not more than a certain threshold.
Should Australia follow the EU ?
So with these suggestions in the EU, it raises the question.. should Australia implement similar policies to accelerate EV adoption in Australia?
