The EU is talking about helping to lower its carbon emissions by requiring rental car companies to go electric five years before the rest of the market has to make the transition. The head of the German government, on the other hand, is not happy about the idea.
A new report says that the rental car and large fleet proposal will be presented later this year. German Chancellor Friedrich Merz is already outspoken about the possibility before it has even been announced, saying that it could destroy Europe’s auto industry and calling for the region to remain “technologically open” to different vehicle types.
EU Could Force Electric Fleets Five Years Sooner
The European Commission is working on a plan that would ban rental car companies and other large companies from buying anything other than EVs for their vehicle fleets starting in 2030, German newspaper Bild reported. The publication cited sources familiar with the situation for the information. This, the report said, could affect 60% of the new car market.
According to the report, the Commission will present the proposal later in the summer. It will then be submitted for approval by the European Parliament.
If it proceeds, such a change would effectively bring forward a major section of the EU’s planned combustion ban. The EU currently plans to phase out combustion engine sales by 2035, to be replaced by EVs. If nearly two-thirds of new vehicle sales in the EU are to these large fleets, it means EVs would make up the lion’s share of new vehicle sales in less than five years. So far this year, EV sales make up 15.4% of new car registrations in the EU, says the European Automobile Manufacturer’s Association.
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Automakers are split on the 2035 ban. Volvo and Rivian are asking for it to be upheld, while others have been lobbying for relief.
German Chancellor Says Ban Would “Miss The Point”
Chancellor Merz said that the new requirements would “completely miss the point of the current joint needs we have in Europe,” Bloomberg News reports. He said that the auto industry was one of Europe’s core industries and that “We must not allow it to be destroyed by focusing on technologies that might not be market-ready enough by a given date for one to rely exclusively on that single technology.”
“Europe is not open enough, not fast enough, not dynamic enough – and I want to help change that.”
-German Chancellor Friedrich Merz
European automakers had big plans for electric vehicles. Mercedes-Benz said it would be fully electric by 2039 worldwide, VW said it would be at 70% by 2030, with others stating similar goals. Now all have changed course, promising more hybrid and range-extended models instead.
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The EU auto industry is already struggling with an influx of low-cost EVs from China. The low prices are “kept artificially low by huge [Chinese] state subsidies,” EC President Ursula von der Leyen said in 2023. The European Commission adopted new tariffs on vehicles from China as a result. It has also encouraged Chinese automakers to bring production to Europe, which has created deals like the joint venture between Stellantis and Leapmotor that has some of the Chinese company’s cars assembled at Stellantis plants in the EU.
A spokesperson for the EC told Bloomberg that it had not adopted the proposal. It was submitted as part of a dialogue with automakers and the EC has only committed to an impact assessment.
Sources: ACEA, Bloomberg, Bloomberg
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