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Corporate cars could lead the electric transition

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This article is part of Taming the Gig Economy, a special report from POLITICO’s Global Policy Lab: Living Cities. Sign up here.

From low-emission zones to taxing polluting vehicles, cities across Europe are looking for new ways to nudge consumers toward electric vehicles — and companies could be the linchpin.

On the political front, the incoming European Commission is set to introduce a corporate fleet regulation. The goals and makeup of such legislation, however, are still unclear.

Transport and Environment (T&E), a green nongovernmental organization, is lobbying for the Commission to put forward a mandate requiring all corporate fleets be electric by 2030. Ride-hailing platform Uber made a similar proclamation in an open letter published in September.

Uber, for its part, touts the increased EV use among its drivers and delivery couriers. An Uber-commissioned report from BloombergNEF, published in March, also laid out recommendations to help the platform meet its goal of having 100 percent zero-emission vehicles in Europe, the United States and Canada by 2030.

The Commission’s corporate fleet regulation would dovetail with this ambition.

“It’s a challenging economic climate and a turbulent political landscape, and so we need to accelerate electrification efforts wherever we can,” Chris Hook, Uber’s chief sustainability officer, said at a POLITICO event on ride-hailing. “But they’re becoming a polarized debate.”

In fact, any mandate is politically unlikely, given it would set an even more ambitious target than the 2035 de facto ban on combustion-engine cars that was passed as part of the Green Deal. Europe’s automakers are facing a crisis in the transition to electric and pleading for lawmakers to reverse the plan.

The European People’s Party took up the cause after winning a majority of seats in the June European Parliament election.

But electrifying corporate fleets could have far wider implications for automakers, consumers and cities than the 2035 target.

About 60 percent of all vehicles sold in the European Union belong to companies’ fleets that are used as company cars for workers commuting into the office, or as taxis or rental vehicles.

As more company vehicles electrify, cities must build out charging infrastructure to accommodate the new cars.

Lacking an overarching political mandate, companies and cities are taking on the challenge themselves.

In Brussels, lawmakers passed a new tax scheme that would make EVs 100 percent tax deductible if ordered by the end of 2026.

“The government changed the tax rules, and the whole company car fleet is going electric very fast,” said William Todts, executive director of T&E, at the POLITICO event. “If you want the charging industry to invest … they need to have the visibility that there’s going to be people that want to use their services.”

In his mind, electrification mandates, favorable tax policies and low-emission zones are the way to create broader charging infrastructure for everyday consumers and a secondary market that would make EVs more affordable.

Italy has also bought into the idea: It has a new tax policy, going into effect next year, that will lower the 50 percent base tax on company cars to 10 percent for EVs and to 20 percent for hybrids.

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