The European Union is preparing to push its green transition into a new and more forceful phase — one that could spark a contentious standoff with parts of its own automotive industry.
According to reports from across the European market, the EU is drafting legislation that would mandate electric vehicle (EV) quotas for corporate and commercial fleets, aiming to pass the law by the end of 2025. The plan envisions a phased rollout: 50% of new fleet vehicles must be electric by 2027, rising to 90% by 2030.
If enacted, the proposal would mark a turning point in Europe's electrification agenda — a shift from voluntary adoption to enforced acceleration. Industry experts describe it as a structural pivot in climate policy, one that risks placing idealism and industrial reality on a collision course.
Stabilizing demand through top-down policy
For EU policymakers, the rationale is twofold: first, to stabilize long-term demand for EVs; and second, to speed up their diffusion into the secondhand market.
Corporate fleets — including company cars, rental vehicles, taxis, and rideshare services — account for roughly 60% of new car registrations in the EU. Mandating quotas would provide a predictable demand floor for electric models, insulating automakers from swings in retail consumer appetite.
Additionally, fleet vehicles are typically replaced every three to five years. That makes them a vital pipeline for populating the used-car market with more affordable EVs — a key step toward lowering the cost barrier for first-time buyers.
But the move has already triggered backlash from the rental car and mobility sectors, which warn that the proposal, while environmentally ambitious, may be economically destabilizing.
Rental giants voice operational concerns
"This is the EU cracking the whip," noted one executive at a European automotive supply firm, referring to the proposed policy as a backdoor method of accelerating the internal combustion engine phaseout.
Critics argue that the plan could impose unsustainable burdens on fleet operators, especially in countries where charging infrastructure remains uneven or inadequate. About 60% of all public charging points in the EU are concentrated in just three countries — Germany, France, and the Netherlands — leaving much of Southern and Eastern Europe underserved.
Nico Gabriel, a board member at German rental giant Sixt, outlined three core concerns:
Infrastructure lag
Charging is often too slow or inaccessible at major travel hubs such as airports and train stations. It's nearly impossible to charge a vehicle within 45 minutes in many of our key locations, Gabriel said, citing operational disruptions and longer wait times.
Cost burden & low residual value
Short-term renters expect immediate, hassle-free use and are often unwilling to navigate charging logistics. Fleet operators, in turn, would face higher upfront costs, lower resale values, and increased maintenance expenses — costs that would inevitably be passed on to consumers, driving up rental prices and potentially depressing demand.
Incentive misalignment
To meet customer needs, rental companies may be forced to extend the service life of gasoline and diesel vehicles — directly at odds with the EU's carbon-reduction goals.
Chinese brands stand to benefit
Beneath the surface lies a broader concern: Europe's automakers may not be ready to compete on cost.
Despite their central role in the continent's EV transition, many European manufacturers continue to lag behind Asian — particularly Chinese — rivals when it comes to affordability and value. If the EU enforces a hard quota, some analysts warn, the biggest beneficiaries could be low-cost Chinese EV brands that are aggressively expanding into Europe.
Adding to the complexity is the shifting global trade landscape. With US tariffs potentially limiting European car exports, manufacturers may be forced to redirect capital and production capacity toward North America, weakening their domestic competitiveness just as Chinese firms gain ground.
"The policy risks encouraging demand that European suppliers may not be able to fulfill — while handing a growing share of the EV market to Chinese brands," said one industry analyst.
Environmental gains versus industrial readiness
Still, proponents of the plan argue that the long-term environmental and economic gains outweigh the short-term disruptions.
According to green advocacy group Transport & Environment (T&E), if the fleet quota is implemented, EU automakers could sell an additional 2 million electric vehicles by 2030 — enough to meet emissions reduction targets and avoid costly regulatory penalties.
The real challenge, observers say, is not the policy's ambition, but the lack of alignment between infrastructure, industry competitiveness, and consumer readiness. The EU's attempt to balance environmental goals with industrial pragmatism is entering a high-stakes phase — one where success or failure could redefine the region's place in the global auto industry.
As one executive put it, "This isn't just about cars. It's about who controls the future of mobility in Europe."
Article edited by Jerry Chen
