Published by Global Banking & Finance Review®
Posted on March 4, 2025
2 min readLast updated: January 25, 2026
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The EU plans to end tax breaks for fossil fuel corporate cars to boost EV adoption, aiming to decarbonize fleets and enhance global competitiveness.
By Kate Abnett and Philip Blenkinsop
BRUSSELS (Reuters) - The European Commission aims to accelerate demand for electric vehicles (EVs) in corporate fleets with an emphasis on ending tax breaks for petrol or diesel-powered company cars, according to a draft paper to be published on Wednesday.
The EU executive will announce its auto industry action plan after a month of discussions with sector executives to ensure EU car producers can electrify their fleets and compete with more advanced U.S. and Chinese rivals.
EU automakers argue they are bringing out new models, but consumer uptake is weak. The market share of EVs in Europe dropped by a percentage point to 13.6% in 2024, according to automaker association ACEA, but did pick up to 15% in January.
The draft communication, seen by Reuters, says that corporate fleets make up about 60% of new car registrations in the European Union.
"To ensure an adequate uptake of zero emission vehicles in corporate fleets, eliminating distorting subsidies for fossil fuelled vehicles is instrumental," it says.
The draft paper states that the Commission will propose by the end of the year legislation to decarbonise corporate fleets, with measures to support demand for electric vehicles.
The Commission will also publish on Wednesday recommendations to national, regional and municipal authorities on action they can take to accelerate uptake of EVs.
ACEA has said limited charging infrastructure is partly to blame for weak demand, with nearly 60% of charging stations in just three countries. Germany's abrupt ending of subsidies and a shortage of affordable EVs until now has also subdued demand.
(Reporting by Kate Abnett and Philip Blenkinsop; Editing by Alexandra Hudson)
The European Commission aims to accelerate demand for electric vehicles in corporate fleets by ending tax breaks for petrol or diesel-powered company cars.
Corporate fleets make up about 60% of new car registrations in the European Union.
Limited charging infrastructure and the abrupt ending of subsidies in countries like Germany are partly to blame for the weak demand for electric vehicles.
The Commission will propose legislation by the end of the year to decarbonise corporate fleets and support demand for electric vehicles.
The Commission will publish recommendations for national, regional, and municipal authorities on actions they can take to accelerate the uptake of electric vehicles.
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