Corporate vehicle fleets continue to rely on diesel and petrol (for now)
The world of fleet vehicles is undergoing a significant transformation, with traditional petrol and diesel engines coexisting with emerging electric and hybrid technologies.
A study published by the International Council on Clean Transportation in 2024 revealed that petrol mild hybrids can help reduce CO2 emissions significantly when used properly. This finding is backed by a 2023 white paper by McKinsey, which projects that petrol mild hybrids will account for 25% of corporate fleet sales in Europe by 2027.
However, diesel remains an important option for commercial fleet vehicles due to their fuel efficiency. In corporate fleets, diesel vehicles achieve 15% to 20% better fuel economy compared to their petrol counterparts. As of 2023, diesel remains the preferred choice for 68% of commercial vans and 45% of passenger cars in European corporate fleets.
The combustion engine is not being left behind in this transition. In their most advanced form, such as modern Euro 6d diesel engines, emissions of NOx and particulate matter are at greatly reduced levels due to advancements in engine technology. Petrol cars, known for their lower sticker price, are a good alternative for mixed-use fleets and urban fleets due to their smoother performance.
The EU aims to abolish new ICE vehicle sales from 2035, giving fleets just under a decade to continue using petrol and diesel vehicles. Until then, the EU plans to encourage the adoption of cleaner technologies through policies such as CO2 emissions standards.
The shift towards electric and hybrid vehicles is undeniable, especially in countries like Germany, France, and Italy, where company fleets predominantly use diesel and gasoline-powered vehicles. However, the transition is gradual, with diesel and gasoline cars still accounting for a large share of company car registrations. According to a report by Transport & Environment in June 2024, BEVs account for no more than 14.1% of corporate sales, which is lower than the private market.
In this transition, fleet managers are turning to increasingly sophisticated digital fleet management tools to optimise maintenance and fuel consumption, resulting in cost savings of up to 30%. Telematics solutions help fleet managers monitor and optimise driver behaviour, further enhancing the cost efficiency and reducing the emissions of ICE vehicles.
The European Automobile Manufacturers' Association (ACEA) highlights the relevance of diesel in European corporate fleets, as evidenced by their 2024 figures showing that 78% of corporate fleet registrations were for petrol or diesel vehicles.
Despite the phase-out of ICE vehicles, it's clear that petrol and diesel engines are expected to remain indispensable powertrains for at least a few more years. The combustion engine is on the way out, but it still offers operational advantages to fleet managers, making it a crucial part of the balancing act in the transition towards a greener future.
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