The French government is pushing for increased corporate adoption of electric vehicles as part of efforts to reduce emissions. While large companies are required to purchase a percentage of low-emission vehicles, many do not comply due to the lack of penalties. Electric vehicle sales among companies in France remain significantly lower than in other countries. Proposals to tighten regulations have met resistance from industries concerned about cash flow, prompting ongoing discussions on incentivizing the transition to greener fleets.
Corporate vehicles are under scrutiny from the government. To encourage the transition to electric car fleets, businesses may receive enhanced incentives. This change is crucial for driving electric models into the second-hand market. Currently, companies account for nearly 50% of new car purchases but, as noted by Minister Delegate for Energy Olga Givernet during her visit to the Paris Motor Show, “are not on board with the greening of their fleets, the purchase of decarbonized vehicles.” She expressed her readiness to enforce stricter obligations on these companies.
Firms operating fleets of over 100 vehicles—about 0.1% of total companies—are already mandated to incorporate at least 20% low-emission vehicles, such as electric and plug-in hybrids, when renewing their fleets. Unfortunately, there are currently no penalties for non-compliance. Consequently, in 2023, around 60% of these companies did not meet their targets, as reported by Transport & Environment (T&E). In the first half of 2024, electric vehicles comprised only 11% of new company cars in France, significantly lagging behind Belgium and Denmark, where incentives are much more robust.
Among the leading companies, La Poste boasts an electric fleet of 38,000 vehicles and e-bikes, which make up 52% of its entire fleet. In contrast, the Carrefour group has only achieved 4% electric and plug-in hybrid vehicles by 2023, although they claim to be engaged in a continuous process of greening their fleet, with 54% of their recent vehicle orders classified as “clean.” Iliad, the parent company of Free, acknowledged its lag in transitioning to electric vehicles, citing unsatisfactory options regarding electric ranges. The company has now ordered Renault electric vehicles made in France and aims for 25% of its fleet to be battery-powered by the end of 2025.
Discussion in Parliament
In early 2024, MP Damien Adam suggested a law to strengthen these obligations, provoking significant concern among certain sectors, including short-term rental companies, who fear that a rapid shift to electric vehicles may threaten their financial stability. The proposal was postponed due to time constraints and the MP’s subsequent non-re-election. Before the dissolution of Parliament, Olga Givernet, who has an engineering background, was appointed co-rapporteur for a special mission on fleet greening. Potential sanctions mentioned by the Minister have not yet been included in the Finance Bill currently under review in the National Assembly.
Professionals indicate that while private consumers may already be hesitant about electric vehicles, businesses require clearer direction for medium- and long-term planning. “Regardless of tax breaks, there remains a fundamental duty to shift towards less-polluting vehicles.” Laurent Petit, marketing director of Alphabet France, believes that electric vehicles are suitable for most business applications. However, larger companies are “evaluating their options in an unstable environment,” recognizing that “committing to a vehicle today means a commitment for 12 to 60 months,” especially as tax policies can fluctuate yearly.
Additionally, nearly half of all company cars are also utilized for personal employee travel. T&E’s analysis reveals that the associated benefits do not provide sufficient motivation for companies and employees to transition away from petrol, leading to substantial costs for the State and Social Security—approximately 4 billion euros annually. Carrefour has reported introducing an annual allowance for executives who relinquish a vehicle and offers a special bonus to employees for opting for electric vehicles for the first time.