KfW Research: Company fleets are key to meeting climate targets in the transport sector

• Already one in seven vehicles in company fleets are hybrid or fully electric
• Small businesses and large enterprises are almost even in fleet electrification
• Electric commercial vehicles make up only 2.4 % of vehicle stock so far

In Germany, transport generates around one fourth of greenhouse gas emissions. In 2022 alone, the sector emitted 148 million tonnes of CO2 equivalent, 60 % of which came from automobiles and 40 % from commercial vehicles. Company fleets are an important lever for electrifying road transport and meeting transport emission targets. Commercial vehicles account for more than two thirds of all new car registrations, and most commercial vehicles are company-owned. Against this backdrop, KfW Research analysed data on company vehicle fleets on the basis of the representative KfW Climate Barometer. It has found that companies are making good progress in electrifying their vehicle fleets. No fewer than one in seven vehicles in company fleets were fully electric (7 %) or plug-in hybrid electric vehicles (8 %) in 2022. Among private owners these figures were a mere 2.3 % (0.9 % and 1.4 % respectively).

In terms of fully electric automobiles, smaller businesses are in the lead. While 5 % of all cars of large enterprises are fully electric, that share rises to 7 % among small businesses. In terms of plug-in hybrid-electric cars, however, large enterprises are slightly ahead of micro-businesses, with 9 % vs. 8 %. Thus, small and large enterprises are advancing at roughly the same pace in the electrification of their fleets.

There are minor differences across the various economic sectors. Companies in the services industries are out in front, with their car fleet made up of 7 % fully electric and 9 % plug-in hybrid electric vehicles. On the other hand, only 5 % of cars operated by construction firms and businesses in the transport and storage sector are fully electric or plug-in hybrid vehicles (4 % and 7 % respectively). The latter in particular could make a significant contribution to speeding up and making the mobility transition more sustainable by electrifying their fleets. Not only do transport and logistics companies have larger-than-average fleets. They also tend to be driven for much higher mileages.

The predominant types of commercial vehicles today are internal combustion vehicles. Electric commercial vehicles are still very rare and make up 2.4 % of vehicle stock. The main reasons for this are likely the delayed technical availability of electric commercial vehicles, high acquisition costs and the virtual nonexistence of high-voltage charging infrastructure for heavy road haulage.

Dr Fritzi Köhler-Geib, Chief Economist of KfW, said:

“Companies play a key role in decarbonising transport with their vehicle fleets. In the field of passenger vehicles, the trend is going in the right direction. One in seven company cars are already partly or fully electrified. That share rises to one in five in enterprises that have enshrined climate action in their business strategy. But battery-electric vehicles so far play only a minor role in commercial transport. There is still a lot of catching-up to do here. In deciding for or against the acquisition of green vehicles, costs are the main consideration for enterprises. Companies consider purchasing an energy-efficient and climate-friendly vehicle if it makes long-term economic sense compared with other drive systems. By adopting suitable measures, policymakers can set relevant incentives here and make progress in decarbonising road transport.”

The current analysis on electric mobility in businesses is available at:
www.kfw.de/fokus

Details about the database:

The current analysis of electric mobility in enterprises is based on the KfW Climate Barometer, a new business survey which provides the first and thus far only representative database for the investment behaviour of all German businesses – from micro-businesses to large enterprises – on the path to climate neutrality. The business survey is designed as a recurring annual survey and provides insights into the attitudes and activities of businesses around the implementation of the energy transition.

The current analyses are based on the data from the first survey wave (survey period: 10 February to 17 June 2022). A total of 10,935 enterprises responded to the survey.