Automotive lenders will be keenly awaiting new vehicle sales figures for January to assess the impact of tough new EU emissions standards for vehicle manufacturers in 2025. Failure to deliver average emissions below 93.6g/km for cars and 153.9g/km for light commercial vehicles will lead to eye-watering fines. If industry sales profiles for 2024 were repeated in 2025, car manufacturers would face a combined fine of €17.8 billion, and van manufacturers a further €4.8 billion, according to Dataforce.
Early indications for January sales suggest OEMs may already be heavily pushing battery electric cars and vans (BEVs) and restricting supply of ICE models to ensure they comply with EU targets. ACEA, the European Automobile Manufacturers’ Association, is pushing hard for flexibilities to mitigate the risk of fines.
Sales figures for 2024 lay bare the scale of the net zero challenge, with registrations of battery electric cars declining year on year, to account for a market share of just 15.4%. A lack of clarity about incentives for BEVs, the high average retail price of new models and low residual values – as well as concerns about charging infrastructure across the continent – are among the reasons behind the decline, according to JATO Dynamics.
Norway led the charge to BEVs, with 88% of its new car sales last year powered by batteries, followed by Denmark (51%), Sweden (35%) and the Netherlands (34.7%). But the continent’s largest new car market, Germany, saw its new BEV volumes fall in 2024.
EU van sales were up 8.3% year-on-year to 1,586,688 registrations in 2024, led by Spain (up 13.7%), and Germany (up 8.4%), but new EU truck registrations declined by 6.3% to 327,896 units. Both vehicle categories continue to be dominated by diesel, which accounted for 84.5% of new vans and 95.1% of new trucks last year. Electrically chargeable vans actually saw their sales decline by 9.1% last year.
Europe’s vehicle manufacturers are pushing back hard at regulations that they believe make them solely responsible for decarbonising the continent’s new vehicle market. ACEA insists the EU’s legislative targets alone are insufficient for achieving meaningful change, although last year’s van sales in the Netherlands illustrate the impact that regulation can have, soaring by 87% as customers brought forward orders to take advantage of the BPM (registration tax) exemption, before it expired at the end of December.
ACEA wants to see a holistic approach that includes enhanced charging infrastructure, tax incentives, and purchase subsidies to drive demand for cleaner cars, vans, trucks and buses.
The bus sector does at least show some promise, with battery-electric models accounting for over 10% of current fleets in Denmark, Ireland, Luxembourg, and the Netherlands.
While OEMs face the threat of BEV imports from China, which last year became the sixth-largest country of origin for new vehicles registered in Europe, Crédit Agricole Personal Finance & Mobility is heading the other way, having successfully finalised its acquisition of half of GAC Finance Leasing. The newly restructured entity, now called Guangzhou GAC-Sofinco Finance Leasing, is the dedicated leasing company of Guangzhou Automobile Group, one of China’s largest OEMs, and will offer a range of financial and operational leasing solutions.
Two of Europe’s largest leasing and fleet management companies have recently reported diverging results for 2024, with Ayvens posting pre-tax profits of €994.3 million for FY2024 (FY2023: €1.218 billion) as its full-service leasing fleet shrank by 3% to 2.626 million vehicles. Arval, however, achieved a 5.6% growth in its leased fleet to 1,796,396 vehicles.
Both companies have seen a sharp increase in the penetration of BEVs on their fleets, with Arval starting to conduct battery health checks on all the BEVs it remarkets. The average state of health of 8,300 ex-lease BEVs that it analysed was 93% (with 100% being the capacity when the vehicles first left the factory).
Continuing the green theme, Volkswagen Financial Services AG has set itself the goal of making both the CO2 emissions of its own business operations at its various locations and the CO2 emissions of the leased and financed vehicles in its portfolio net-carbon-neutral in Europe by 2030.
