Fleet electrification could cut operating costs by up to 64% for company cars and 38% for company LCVs according to a new study by EY and Eurelectric – the federation of the European electricity industry.
The report shows that fleet electrification across Europe could deliver up to €246bn in operating cost savings by 2030, driven by lower energy, maintenance and tax costs. Small and Medium-sized Enterprises (SMEs) and large operators in the UK are particularly well-positioned to benefit due to strong fiscal incentives and fast-improving charging solutions.
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The UK currently has one of the highest penetration rates of battery electric vehicles (BEVs) in corporate fleets, with more than 75% of new corporate car registrations being electric in 2025, according to EY analysis. This is largely driven by low Benefit-in-Kind (BiK) taxation, which is consistently highlighted in EY and Eurelectric’s latest report as one of Europe’s strongest demand levers.
Maria Bengtsson, EY UK & Ireland Mobility Leader, said: “The findings from EY’s latest report with Eurelectric provide a compelling argument in favour of fleet electrification for UK companies. The cost savings as well as the positive environmental impact businesses can tap into by electrifying their fleets is clear – adding to the significant regulatory incentives in place encouraging companies to adopt cleaner and greener transport. However, as the UK moves from early adoption to mass uptake, the progression of wide-scale fleet electrification will hinge on the speed of infrastructure development, including charging availability, affordability and interoperability. The report also highlights barriers to EV adoption, such as expensive upfront purchase costs for EVs and total cost of ownership challenges linked to residual value uncertainty.”
The UK’s policy landscape provides fleet electrification incentives
The UK’s policy stability stands out positively, with the report finding that electric corporate cars offer the largest operating cost advantage among the markets analysed (UK, France, Germany and Sweden), due to a combination of supportive tax treatment, lower exposure to clean-air charges, improvements in charging infrastructure, and favourable tax and urban-charge rules.
UK electric vans show approximately 38% savings compared with diesel, similar to Sweden (45%) and France (40%), and significantly more than Germany (10%). Meanwhile, for corporate cars, the UK shows the largest operating cost savings among the countries featured in the report, equating to €0.19 per kilometre. This is a higher cost saving than Sweden (€0.12 per kilometre), France and Germany (both €0.09 per kilometre respectively).
Furthermore, the UK’s BiK trajectory, which is set to rise from 3% to 5% by 2027/28, is singled out as one of Europe’s most influential incentives driving the uptake of electric corporate cars. Additionally, the Zero Emission Vehicle (ZEV) Mandate for vans, which started in 2025, supports the transition across LCV fleets. However, penetration in the van market for electric vehicles (EVs) remains low, with BEVs only accounting for 10.4% of all new UK LCV registrations in January 2026, according to the Society of Motor Manufacturers and Traders (SMMT), highlighting the scale of the electrification challenge which lies ahead for LCVs.
Grid capacity remains a key challenge
While UK grid connection delays remain a challenge, with a typical duration of around 18-36 months, significant queue reforms are being implemented, which could unlock further advantages of fleet electrification in the UK, including improved operational efficiency. The Ofgem approved Connections Reform includes the shift from a “first-come, first-connected” to a “first-ready-and-needed, first-connected” model, and tougher end-to-end performance obligations on network operators, and is now being implemented to prioritise deliverable demand such as EV charging and fleet depots.
The report highlights ongoing constraints in grid connection timelines across Europe, including the UK. However, it also spotlights innovative solutions already in use – such as battery-integrated chargers, smart-charging systems and flexible connection agreements – which can reduce lead times and support faster rollout.
The UK’s use of leasing, bundled fleet solutions such as Fleet-as-a-Service and Car-as-a-Service, and salary-sacrifice EV schemes are highlighted in the report as reducing capital expenditure (CapEx) barriers for SMEs.
Although the UK is not in the Alternative Fuels Infrastructure Regulation (AFIR), the report still positions long-haul electrification challenges as universal in Europe, with implications for the UK. While electric trucks remain at an earlier stage of adoption, the UK offers some of the highest truck grants in Europe, with up to €139,000 for the largest vehicles, making it an attractive market for heavy-duty vehicle electrification. Depot-first charging and energy-management strategies could materially reduce costs and accelerate deployment. Despite this, the UK is still some way off achieving its ZEV Mandate targets for electric trucks, with only 587 of the 40,504 heavy goods vehicles (HGVs) registered in the UK in 2025 being zero emission, according to the SMMT.
