European Commission Publishes the Automotive Package

On 16 December 2025, the European Commission adopted the Automotive Package, a set of proposals aimed to improve the competitiveness of the European automotive sector while facilitating the transition towards clean mobility. The package includes 3 initiatives, each addressing separate issues: (1) Review of Regulation of CO2 emissions standards for cars and vans; (2) Automotive Omnibus; (3) Regulation on Clean Corporate Vehicles and (4) the Battery Booster strategy. While the first three initiatives are legislative proposals, the Battery Booster Strategy takes the form of a non-binding Commission communication.

Review of the Regulation of CO2 emissions standards for cars and vans

As part of the review of the existing CO₂ regulation, the Commission proposes several significant changes.

From 2035 onwards, car manufacturers would be required to meet a 90% reduction in tailpipe emissions. The remaining 10% could be compensated through the use of low-carbon steel produced in the EU, as well as e-fuels and biofuels.

Ahead of 2035, the proposal introduces a number of flexibilities. Carmakers would be able to benefit from “super-credits” for the production of small, affordable electric cars manufactured in the EU, aimed at accelerating the market deployment of compact EV models.

For the 2030 CO₂ targets, additional flexibility is introduced through a banking and borrowing mechanism for the period 2030–2032. The Commission also proposes specific relief for the vans segment, where electrification has proven more challenging, by reducing the 2030 CO₂ reduction target from 50% to 40%.

Automotive Omnibus

The Automotive Omnibus initiative seeks to lower administrative complexity and costs for European manufacturers through targeted simplification measures, including:

• Electric vans (eVans): Removal of regulatory barriers by exempting eVans from tachograph and speed-limitation requirements, alongside an extension of driving licence category B eligibility.
• Euro 7: Reduction of adjustment costs linked to low-temperature laboratory emission tests; vehicle-type approval for heavy-duty vehicle engine tests; and clearer methodologies for processing OBM and OBFCM data.
• Small affordable electric cars: Introduction of a new M1 sub-category (“M1E”) for small electric vehicles, defined by a maximum length of 4.2 metres.
• EV interoperability: New requirements to ensure interoperability between vehicles, charging infrastructure, and the electricity grid.
• Noise and AVAS: Updated limit values for acoustic vehicle alerting systems to align with the latest UNECE developments.

Following adoption by the Commission, the European Parliament and the Council will now need to adopt their negotiating positions, before agreeing on a final text. Discussions are expected to begin in Q1 2026.

Having contributed to the development of these initiatives through responses to public consultations, Leaseurope will closely monitor the legislative process and engage further where appropriate.

Focus on the Regulation on Clean Corporate Vehicles - Mandate Through the Back Door

As part of its Automotive Package, the European Commission has published a proposal for a Regulation on Clean Corporate Vehicles. The initiative aims to support the decarbonisation of EU road transport through three main objectives: stimulating demand for zero- and low-emission vehicles (ZEVs), reducing fossil fuel expenditure in the sector, and accelerating the availability of ZEVs on the second-hand market.

To achieve these goals, the proposal introduces mandatory targets at Member State level for 2030 and 2035. These targets would require a defined share of new corporate car and van registrations by large companies to be zero-emission. While Member States would retain discretion over how to meet their national targets, the proposal also includes a significant restriction: from 2028 onwards, Member States would be prohibited from providing financial support for corporate vehicles that are not low- or zero-emission and manufactured in the EU.

European leasing and rental companies are already playing a leading role in the transition to low- and zero-emission mobility. As the largest buyers of LEV and ZEV vehicles, they are investing heavily to make ZEV adoption attractive and accessible for consumers, SMEs, large corporates, and public authorities. In fact, Leaseurope members are already outperforming the wider new vehicle market in their uptake of low- and zero-emission vehicles.

Against this backdrop, Leaseurope believes the Commission’s proposal risks missing its stated objectives. Rather than supporting the transition, it could lead to unintended negative consequences for consumers, SMEs, and the wider EU economy.

In particular, Leaseurope does not consider national purchase targets to be the right instrument to drive ZEV uptake. Instead, we call on the EU and Member States to focus on improving the enabling conditions for electrification, addressing persistent challenges in the second-hand market, and introducing effective incentives and support frameworks for corporate ZEV adoption. Without these measures, there is a real risk that Member States will resort to rigid national purchase obligations for companies, creating significant financial and administrative burdens that could ultimately slow down—rather than accelerate—the transition to zero-emission mobility.

Leaseurope is actively engaging with the European Parliament, Council and Commission and will continue to do so throughout the legislative process as a key priority for the wider leasing and rental industries. 

For more information, please contact Martina Apicella at m.apicella [at] leaseurope.org