Wrapping up: The latest electrification trends
It’s no surprise that, having hit a global peak in 2017, sales of internal combustion engine (ICE) vehicles are now in steady decline. Meanwhile, developments in electric vehicles (EVs) are moving fast, and it can be tough to keep up with the latest changes. At LeasePlan, we’re always on top of the freshest trends in the world of EVs, and we’re here to help advise customers on what’s next – and what’s best – for them.
Developments in electric vehicles (EVs) are moving fast, and it can be tough to keep up with the latest changes. At LeasePlan, we’re always on top of the freshest trends in the world of EVs, and we’re here to help advise customers on what’s next – and what’s best – for them. Without further ado, here are some recent key developments in vehicle electrification.
EU bans new petrol and diesel cars by 2035
Vehicle availability in Europe – and across the world – may currently be delayed, but the European Union (EU) and vehicle OEMs are still moving forward fast with electrification. The biggest announcement in recent months is the European Parliament’s adoption of a proposal to ban new sales of petrol and diesel cars by 2035. The hope is that this will support the EU’s ambition to become completely carbon neutral by 2050.
Other measures being taken in Europe and beyond:
- The United Kingdom (UK) plans to end the sale of new petrol and diesel cars by 2030 and aims for all new cars and vans to be zero-emission vehicles by 2035.1
- The European Parliament has agreed that car manufacturers need to reduce average emissions from newly sold cars by 15% by 2025.
- In Norway where EVs are now the norm, EV subsidies are being scrapped, with VAT exemptions for luxury EVs the first to go.
- Belgium is looking to make the switch to all-electric company fleets sooner than most countries. After 2026 only zero emission cars will be tax deductible as company cars.2
With deadlines approaching, the opportunity grows
The EU ban on new ICE vehicle sales by 2035 will have an effect on car manufacturers, forcing them to speed up EV investments. Sales of EVs are on the rise, and it’s expected that battery electric and plug-in hybrids will represent 23% of new car sales by 2025,3 with three-quarters of those being battery electric.
Sales of electric commercial vehicles, meanwhile, have taken off in the past two years, with sales in Europe doubling from 2020 to 2021.4^ ^
From Build Back Better to the Inflation Reduction Act: what’s new for EVs in the United States
On the 28th of July there was a shock announcement from the United States, with the key components of the Build Back Better plan being revived through the Inflation Reduction Act. While the package is not final, with the Senate still needing to vote on the legislation, it’s a big step forward for the United States in combating climate change. The plan will tackle many areas like addressing inflation, corporate taxation, and climate change. We’ve round up what it means for vehicle electrification:
- Consumer tax credits of $7,500 for new qualifying electric vehicles. The current tax credits for EVs will be scrapped and replaced with these new credits. The credits will only apply to SUVs and commercial vehicles costing less than $80,000 and smaller vehicles costing less than $50,000.5
- Used electric vehicle tax credits of $4,000 for second hand EVs costing below $25,000.
International companies embracing electrification
Large corporates play an important role in lowering overall CO2 emissions – so it makes sense to start with company cars. Each year, LeasePlan conducts a study on the sustainability of international company industry fleets in Europe, covering 24 European countries and eight industries.
The 2022 Fleet Sustainability Ranking highlights the trend away from ICE vehicles in favour of low- and zero-emission vehicles like hybrids, plug-in hybrids and battery electric vehicles (BEVs).
Governments, car manufacturers and companies alike are making more concrete moves on the road to zero emissions; after all, with stricter regulations comes higher pressure to make the switch (or be left behind …). At the same time, today’s industry trends make it clear that low- and zero-emission vehicles are essential for lowering overall CO2 emissions from road transport. We’re moving in the right direction, and now it’s (just) a matter of how fast we can reach our destination!