---
title: Europe's Proposed Company Car Targets Would Fall on Leasing Firms, Not Their Customers
description: The European Commission's proposed clean corporate vehicles rules would put company car electrification targets on the leasing firm that owns the vehicle.
author: Darie Nani (Editor-in-Chief)
updated: 2026-08-02T15:25:24.450Z
canonical: https://www.sovereignmagazine.com/article/eu-clean-corporate-vehicles-leasing-firms-arval-athlon
image: https://cdn.nanimediahouse.com/eu-corporate-fleet-leasing-rules-79036.webp
categories: EU Focus
content_type: News
region: Europe
publication: Sovereign Magazine
schema_type: Article
---

A company car in most of the European Union is registered not to the business whose staff drive it, but to whoever owns it, which is usually a leasing firm. Under the regulation on clean corporate vehicles that the European Commission proposed in December, that is also where the duty to electrify would sit.

The leasing side of that arrangement grew larger on 31 July, when Arval, the vehicle leasing arm of BNP Paribas, completed its purchase of Athlon from Mercedes-Benz Group. BNP Paribas says the deal takes Arval to a combined fleet of 2.3 million vehicles and creates what it calls the European co-leader in long-term vehicle leasing. Arval's own financed fleet stood at 1,894,865 vehicles at the end of December 2025, before the purchase closed, of which 342,340 were electric. The bank will set out the combined business's direction at an investor briefing in the first half of 2027.

## Leasing and Rental Companies Come First on the Commission's List

The Commission published the proposal, COM(2025) 994, in Strasbourg on 16 December 2025. Around 10 million new cars and 1.5 million new vans are registered in the Union each year, [the text states, and around 60% of the cars and around 90% of the vans are corporate vehicles registered by legal entities](https://transport.ec.europa.eu/document/download/8940df68-06ca-40eb-a4bd-208679ca89a8_en?filename=COM_2025_994_1_EN_ACT_part1.pdf). When it lists what those vehicles are, the first category named is vehicles registered by leasing and rental companies, ahead of company cars given to employees as a benefit in kind, vehicles run by hauliers, taxi, ride-hailing and car-sharing firms, and the demonstrators sitting on dealer forecourts.

The obligation would run through national governments rather than land on companies directly. Member states would be set targets for the share of new zero- and low-emission registrations by large companies from 2030, differentiated between them, with the design of the measures left to each government. Vehicles registered by small and medium-sized firms sit outside the scope. On the Commission's own timetable the regulation would enter into force in 2027, obligations would begin in 2030, and intermediate milestones would track the CO2 standards already set for 2030 and 2035.

Leasing companies were in the room while it was drafted. They were among the 15 stakeholders at a strategic dialogue the Commission held on 17 July 2025, alongside industry associations, fleet operators, ride-hailing platforms and component suppliers. The proposal records that the meeting emphasised the need for a mix of policy measures, fiscal incentives and infrastructure investment, and that it expressed a general preference against binding legislative mandates for light-duty vehicles at fleet or company level.

## In Most Member States the Car Is Registered to the Lessor

[Arval's Mobility Observatory, the company's own research arm, set out in July what that drafting means in practice](https://www.arval.com/amo/clean-corporate-vehicles-proposed-eu-regulation-understanding-how-corporate-fleets-could-become). In most member states a vehicle is registered in the name of its owner, so when a business leases its fleet instead of buying it, the greening obligation would fall on the large leasing company rather than on the business itself.

The Observatory's reading is that a very small business, an SME or even a private individual leasing from a large lessor would face no fine, but could find the freedom to choose the vehicle that suits them narrowed by the lessor's own target. Under the EU definition it cites, a large company is one that exceeds at least two of three criteria on its balance sheet date: a balance sheet total of 20 million euros, net turnover of 40 million euros, or 250 employees on average over the financial year. The text is now with the European Parliament and the Council of the European Union, which have to agree before it can be adopted or rejected.

## France Added Penalties in 2025, and Its Corporate Fleet Shrank

A French law in force since March 2025 added financial penalties to an existing system of greening quotas for French companies, through a tax the Observatory calls the Annual Incentive Tax. Battery-electric registrations in France rose by more than 70% in the first quarter of 2026 against the same quarter of 2025, a rise the Observatory attributes both to that tax and to a reform of benefit-in-kind rules.

The French corporate fleet also aged and shrank. After cumulative growth of 28.7% between 2019 and 2024, the number of vehicles in French corporate fleets fell for the first time in 2025. When fleets get older, older petrol and diesel cars stay on the road for longer, which the Observatory reads as slowing the switch to electric rather than speeding it. It flags a second risk: binding targets could push some employers out of leasing altogether and into paying employees a cash allowance, taking those cars out of the corporate fleet and out of the reach of the rules.

## Corporate Fleets Are Already Ahead of Private Buyers

The Commission's case is that the uptake of zero- and low-emission vehicles in corporate fleets is currently underexploited. The Observatory disputes that reading. Across the top eight European markets in the first quarter of 2026 it puts corporate fleets at 26% electrified, against 18% for private individuals.

The wider market has moved in the same direction. Battery-electric cars took 20.7% of EU new car registrations in the first half of 2026, up from 15.6% a year earlier, on figures published by the European Automobile Manufacturers' Association, while petrol and diesel together fell to 29.7% of the market from 37.8%.

The Observatory expects the proposal to reach fleet tax regimes before the targets themselves take effect. From 2028, it says, the rules could limit the indirect financial support given to anything other than low- and zero-emission vehicles.

## FAQ

**Q: What is the EU's clean corporate vehicles proposal?**
It is a draft regulation the European Commission published on 16 December 2025 as COM(2025) 994. It would set member states targets for the share of new zero- and low-emission cars and vans registered by large companies, starting in 2030, and leave each government to decide how to hit them. It has not been adopted and is still being examined by the European Parliament and the Council.

**Q: Which companies would the clean corporate vehicles regulation apply to?**
Large companies only. Under the EU definition Arval's Mobility Observatory cites, that is a company exceeding at least two of three criteria on its balance sheet date: a balance sheet total of 20 million euros, net turnover of 40 million euros, or an average of 250 employees over the financial year. Vehicles registered by small and medium-sized firms are outside the scope.

**Q: Does the obligation fall on the business leasing the cars or on the leasing company?**
In most member states a vehicle is registered in the name of its owner, so on the Observatory's reading the obligation would fall on the leasing company rather than the business whose staff drive the cars. A smaller business or an individual leasing from a large lessor would not be fined, but could find its choice of vehicle narrowed by the lessor's own target.

**Q: When would the EU corporate fleet targets start?**
On the Commission's own timetable the regulation would enter into force in 2027 and obligations for member states would begin in 2030, with intermediate milestones aligned to the CO2 emission standards already set for 2030 and 2035.

**Q: What happened in France when a similar law came in?**
A law in force since March 2025 added financial penalties to existing greening quotas through the Annual Incentive Tax. Battery-electric registrations rose by more than 70% in the first quarter of 2026 against the same quarter of 2025, which the Observatory attributes to that tax and to a reform of benefit-in-kind rules. Over the same period the French corporate fleet aged and, after cumulative growth of 28.7% between 2019 and 2024, fell in size for the first time in 2025.