The European Union's long-awaited automotive package is still being fought over in the European Parliament, and one of the sharpest dividing lines is how aggressively company-car fleets should be forced to go electric. According to electrive, the Social Democratic group (S&D) is demanding a significantly stricter electric-vehicle quota for corporate fleets than the one the European Commission put forward in its December draft.
That matters to Tesla more than the headline suggests. In several large European markets, company-car and fleet registrations — not private buyers — are the dominant route to market for new cars. A higher mandated share of electric vehicles in that channel translates fairly directly into demand for battery-electric models.
What the Social Democrats want
The S&D draft, authored by MEPs Tiemo Wölken and François Kalfon, calls for an EU-wide target of 54% electric cars among company vehicles, up from the 45% figure in the Commission's December proposal. The group also wants member states to stop granting tax or financial advantages to fossil-fuel company cars from 2028, and to reserve tax privileges for electric vehicles "made in Europe."
National examples show how far apart the positions are. In Austria, electrive reports that the Social Democrats propose a 70% electric share for company fleets by 2030, against the 58% outlined by the Commission.
| Measure | Commission draft | S&D proposal |
|---|---|---|
| EU-wide EV share, company cars | 45% | 54% |
| Austria fleet target by 2030 | 58% | 70% |
| Tax breaks for fossil company cars | Phased | Ended from 2028 |
The "made in Europe" condition
The demand that tax privileges apply only to electric vehicles built in Europe is the most consequential clause for manufacturers. It is aimed at channelling fleet incentives toward European production rather than imported cars, and it would reward carmakers with EU factories.
Tesla builds the Model Y for European customers at its Giga Berlin plant in Grünheide, so a "made in Europe" tax condition could play to its favour for that model — though the precise wording, and how it treats vehicles assembled outside the bloc, is exactly the kind of detail still being negotiated. Nothing here is settled.
Timeline: not soon
This is a debate, not a decision. Positions among the political groups remain far apart, and lobbyists from affected companies and associations continue to push their interests. The European Parliament is not expected to vote on the new fleet and automotive rules before November 2026, and the broader auto package may not be finalised until 2027.
German Chancellor Friedrich Merz (CDU) is reportedly insisting on reaching agreement with the centrist groups — the Social Democrats and the liberal Renew group — which suggests the final quota will likely land somewhere between the Commission's draft and the S&D's tougher line.
What to watch
For European fleet operators and the manufacturers chasing them, the figures above are the ones to track as negotiations continue through the second half of 2026. A 54% company-car EV target, a 2028 end to fossil-car tax breaks, and a "made in Europe" condition would each reshape how fleets buy — and which cars they buy.