In two-thirds of EU Member States, companies do not get a clear tax signal to switch to electric Two-thirds of EU member states are failing to provide companies with the tax incentives necessary to steer them away from fossil-fuel cars. In 18 out of 27 Member States, the tax gap between an EV and a fossil-fuel car is not enough to compensate for higher EV prices, according to new T&E analysis [1]. At a time when Europe should be reducing its dependency on oil, weak company car tax risks locking the continent into a decades-long reliance on petrostates. To assess where clear incentives exist, T&E evaluated whether the gap exceeded the EV price premium, which stood at €10,650 in 2025 [2], reasoning that where taxes offset the upfront premium, the lower running costs of EVs can then make the business case for electrification. However, the study finds that the tax gap between electric and fossil-fuel company cars surpasses the EV price premium only in 9 countries [3]. Company cars are key to tackling road transport pollution. They account for 59% of new car registrations and 78% of oil imports consumed by new cars [4]. Last December, the EU presented the Clean Corporate Vehicle regulation which sets national electrification targets for the car fleets of large companies, proposing an EU-wide average of 45% of their new cars to be electric in 2030. It proposed Member States, not companies, be responsible to meet them. This is the right way forward, T&E said, since Member States can make reforms to extend the tax gap between powertrains and increase the incentive for a company to register an EV. Belgium did so in 2021 and corporate EV registrations grew from 8.8% in 2021 to 54.2% in 2025. France also introduced several reforms in 2024 and 2025, making corporate car registrations hit a record 41.3% in March 2026 [5]. But in the remaining large car markets (Germany, Spain, Italy and Poland) reforms to make the tax gap surpass the EV price premium are yet to happen. Stef Cornelis, Fleets and Freight director at T&E, said: “At a time when the EU wants to cut oil dependency, governments of the EU’s largest car markets are failing to incentivise companies to go electric. The EU fleets regulation is the catalyst needed to break this inertia. The EU Council and EU Parliament should inject more ambition into the Commission’s proposal to ensure Europe can reduce oil imports rapidly.” Almost half (13) of EU member states still give a financial subsidy to companies running a petrol car. In Germany, where 28% of all EU new fossil-fuel corporate cars are registered, companies get a net €10,000 subsidy. That’s more than double what they receive in any other country. However, in France petrol cars registered by companies pay €25,000 in taxes, while in Denmark — which tops the ‘tax gap’ ranking — they pay €37,000 in taxes. As a result, several large car markets are still driving the bloc’s dependency on oil supplies. While Germany gives a subsidy equivalent to €0.50 for every litre of petrol its company cars burn, France gets a revenue equivalent to €10.30 per litre [6]. Regional differences also exist: in South-West Europe, Portugal’s revenue is equivalent to €4.50 per litre, while Spain’s equals only €1.20 per litre. In Slovenia, the best example in Eastern Europe, the state gets a revenue equivalent to €2.10 for each litre of petrol, while Poland’s revenue equals only €0.40 per litre. Germany and Poland alone account for 52% of corporate registrations of high oil-consuming D-segment cars, yet both continue to tax them weakly. This risks locking Europe’s car fleet into higher oil demand for years and sucks money from companies that could be used in other areas of the business. Tax systems are also failing to progressively tax the most polluting fossil-fuel cars, T&E finds. In France, for a segment E car which consumes one and a half times more fuel per kilometer than a smaller segment C car, companies pay twice as much in taxes, while in Portugal they pay almost five times more. However, in most EU member states the tax increase as the car becomes bigger is negligible. Germany again serves as the worst in class. For a fossil-fuel car in segment E, German companies get an even bigger subsidy than for a segment C car. To fix all these shortcomings, T&E said that the provision in the EU Clean Corporate Vehicles regulation to end subsidies for petrol cars and only allow them for EVs that are made-in-Europe should be adopted. Stef Cornelis added: “It’s perplexing that in almost half of EU countries, governments are still giving a subsidy for companies to drive a petrol car. Lawmakers and Member States must defend the provision that financial benefits can only be given to a company car when it is electric and produced in Europe. This way we create jobs locally, reduce oil imports and safeguard the future of Europe’s auto industry.” NOTES TO EDITORS [1] T&E examined purchase subsidies, acquisition tax, ownership tax and the three most important company-specific taxes: benefit in kind, depreciation write offs and VAT deductions. Results show taxes paid by a C segment car for a typical ownership period of four years. Research was conducted as part of the fourth annual publication of the Good Tax Guide, T&E’s flagship tool on car tax. [2] The average gap between the purchase price of an EV and a fossil fuel car last year was €10,650, calculated as the weighted average of models sold in the EU based on Autovista and Dataforce data. [3] Strong EV tax incentives usually lead to rising corporate EV registrations, while weak or absent incentives tend to result in stagnation. Sweden, Finland and Austria are exceptions: despite high corporate EV shares, they are not in the leading group because they have reduced EV tax incentives without increasing taxes on ICE vehicles, narrowing the tax gap. [4] The calculation combines the number of corporate and private registrations in 2025, their respective average annual mileage, and the average fuel consumption of ICE models registered by each ownership type. [5] Belgian data from Dataforce French data from Arval Mobility Observatory and Dataneo, Bilans Marché 2023, 2025, et 2026 and it refers to true fleets, which are the scope of the reforms and represent the majority of the corporate car market. [6] The data are based on Segment-D cars running 30,000 kilometres per year and consuming 2,349 litres of petrol per year (9,396 liters over a typical ownership period of 4 years). Taxes considered to draw the equivalence comprise those paid by both the company and the employee, including: acquisition tax, ownership tax, employer and employee Benefit-in-Kind (Bik), VAT deductions, and depreciation write-offs. News release from T&E.