From diesel to electric: the forced transition of car fleets

The era of diesel-only vehicles is drawing to a close, but the era of electric vehicles is far from over. Between these two worlds, company car fleets are walking a tightrope. Changing tax regulations are constantly reshuffling the deck and strongly encouraging companies to switch to electric vehicles, often against their will. And 2026 will be no better. The threshold for triggering the _CO2 emissions tax is being tightened even further, meaning that two-thirds of new cars on the market will be taxed as of January ^1st , while the threshold for the weight-based tax will be lowered from 1,600 kg to 1,500 kg.

In this context, diesel, and then plug-in hybrid electric vehicles (PHEVs), which were primarily favored by businesses, have become persona non grata. By the end of October 2025, with 64,713 vehicles, diesel had fallen below the symbolic 5% mark overall, a decline of 38.1%. This drop is partly due to demand, but mainly to supply. Only a handful of manufacturers now offer this type of engine; these include the Renault, Stellantis, Volkswagen, Mercedes, and BMW groups, as well as, to a much lesser extent, Ford. The range of players for PHEVs is much broader, but the decline has also begun. Down 25.7%, this technology now represents only 6.1% of the market, or 81,468 vehicles.

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Yet, whether we like it or not, these two technologies remain interesting alternatives for decarbonizing the automotive industry. Long a favorite of company fleets, diesel has built its reputation on solid arguments: fuel efficiency, durability, and unbeatable running costs over long distances. On the highway, a diesel vehicle remains difficult to compete with even today; fuel consumption hovers around 5 liters per 100 km, a performance that very few hybrids can claim, except for the plug-in hybrid diesels offered by Mercedes-Benz, a unique offering on the market. This performance allows for a drastic reduction in _CO2 emissions during use, at a lower cost for users who travel long distances. With charging at €0.60/kWh on the highway and a range that barely exceeds 350 to 400 km, electric vehicles cannot compete under these conditions. Nevertheless, public authorities have dismissed this reality. As a result, diesel vehicles are suffering from a significantly higher TCO (total cost of ownership), even though their fuel consumption remains low and they are easy to use. Added to this is that resale is now more complicated. Their residual values ​​are falling, and leasing companies have already anticipated a drop in demand.

Faced with the decline of diesel, the plug-in hybrid is emerging as a transitional alternative. Until recently, this technology was presented by manufacturers as an alternative to diesel, and the government provided tax incentives. On paper, the promise remains appealing: a combustion engine for versatility, a battery for short trips, and a reduced carbon footprint thanks to regular battery charging and daily commutes in electric mode. However, the system's efficiency relies entirely on user behavior, and in reality, many company-owned plug-in hybrid vehicles are rarely plugged in. Lacking discipline, they operate mostly on the combustion engine, with actual emissions far exceeding official figures. A 2023 study by the NGO Transport & Environment revealed that company-owned PHEVs could emit up to three times more _CO2 than their certified figures. The government has taken note. The PHEV quickly lost its advantages and is now subject to the same taxes as internal combustion engine vehicles, including diesel. This is absurd. While early versions had a rather limited all-electric range requiring frequent charging, newer generations now boast ranges of up to 100 km, or even double that, as promised by the Lynk & Co 08, which claims up to 200 km. When used appropriately, PHEV technology also represents a credible alternative to electric vehicles for decarbonizing fleets.

While diesel remains the best solution for reducing _CO2 emissions when a company's needs don't allow for electric vehicles, as does the PHEV, which is seen as a stepping stone, taxation has had the final say. Like a groundswell, it is profoundly altering the landscape of company fleets. In October 2025 alone, sales of electric cars in this segment jumped by 66%, representing a market share of 28%. But this is just the tip of the iceberg, because since the beginning of the year, sales of private vehicles to companies have fallen by 10.6%, while the overall market has declined by "only" 5.4%. Therefore, it seems that the gap between the actual needs of businesses and what taxation imposes on them is constantly widening.