The European Union is considering accelerating the process of banning internal combustion engine vehicles. While plans currently aim to end the sale of these vehicles across the continent by 2035, a new report suggests this ban could begin earlier in the car rental sector.

EU to ban internal combustion vehicle rental

According to a report by the German newspaper Bild, citing unnamed sources within the European Commission, car rental companies could be banned from purchasing internal combustion vehicles starting in 2030. If such a regulation comes into effect, major companies like Europcar and Sixt will be able to include only electric vehicles in their fleets.

This step is expected to trigger a rapid transformation in the car rental sector, as leased vehicles are typically replaced within a year or two. Under the plan, it is possible that the rental car fleet will be largely electric by 2032. While some companies currently offer a limited number of electric vehicles, these vehicles are becoming less popular with users due to high rental fees.

However, the offer may not be limited to car rental companies. Expansion to include large corporate fleets is under consideration. Approximately 20 percent of new vehicle sales in Europe are made to rental companies, while 60 percent of total vehicle sales are made to fleet customers. Therefore, the enactment of the proposal could bring forward the impact of the ban, scheduled to take effect in 2035, by several years.

Ceasing fleet sales of internal combustion vehicles will lead to a rapid decline in the market for these types of vehicles. This will directly impact the used car market, as fleet sales are the largest source of regular vehicle entry into the used car market. If the new regulation goes into effect, finding used internal combustion vehicles could become increasingly difficult after 2030.

The situation could have a similar impact on car manufacturers. The halt in fleet orders could make the production of some internal combustion models uneconomical. This could lead to some manufacturers withdrawing certain models from the market before 2035.

In a response to Bild, the European Commission confirmed that it is working on new regulations for car sales. However, no official decision has yet been made regarding restrictions on fleet sales by 2030. Industry sources, however, indicate that the European Union is considering such steps to accelerate the electric vehicle transition.