How is the electrification of the vehicle fleet progressing in the Grand Duchy of Luxembourg?
Today, electric cars are part of everyday life for a growing number of people. They now play a key role in manufacturers’ strategies. Their ranges of electric vehicles now cover every segment, from SUVs to city cars, saloons and sports cars. The choice is now vast, and there is something to suit everyone.
Technology is evolving rapidly. Have the barriers to adoption now been removed?
The current range of electric vehicles offers compelling arguments in terms of performance, driving comfort, range and charging speed. The new models coming onto the market are overcoming many of the barriers that have been cited in recent years. Furthermore, the charging infrastructure has expanded considerably, giving users greater peace of mind when travelling.
What obstacles remain today?
We need to take into account users’ habits and the context in which they find themselves. For example, access to electric vehicles is more difficult for those who are unable to charge their vehicles at home or at work.
Electric cars are establishing themselves as the new market standard (Photo: Marie-De-Decker)
How is the electrification of the vehicle fleet affecting your business?
Currently, 60% of the vehicles we deliver are electrified, the majority of which are fully electric. These technologies account for 30% of our fleet. This trend reflects our commitment to supporting our customers in their transition to electric mobility solutions.
Today, the early adopters of electric cars (those who switched four years ago) are due to renew their leasing contracts. Very few are going back to combustion engines. This trend will also lead to the growth of the second-hand market. In this regard, it is clear that the technology is ageing well, with batteries proving their performance over time. There are also real opportunities in the second-hand market.
Today, the electric vehicle market is supported not only by government purchase grants but also by a benefit in kind for business vehicles at a more favourable rate than for other types of engine. What message does the renewal of the Klimabonus grant for the purchase of an electric vehicle send?
This is still only a draft bill, which has not yet been passed by the Chamber of Deputies. The current scheme, which provides a grant of €3,000 or €6,000 towards the purchase of a fully electric vehicle, runs until the end of June 2026. The government intends to extend it until 2030. This is clearly a positive sign, supporting the transition and offering reassuring prospects for users. The measure will also help to support the development of the second-hand market, which still needs to be structured.
Benefits in kind are another strong argument in favour of electric vehicles. The electrification of the vehicle fleet is still largely driven by the provision of company cars. The current rate, at 0.5% or 0.6%, applies only to fully electric vehicles.
Electric cars are establishing themselves as the new market standard (Photo: Marie-De-Decker)
What role do you play in this period of transition?
We act as a catalyst. Operating leases facilitate the adoption of these new technologies through the support we offer fleet managers and the advice we provide to users. Our aim is not to promote one solution over another, but to inform users about the available alternatives. Often, when you factor in government incentives, benefits in kind and overall running costs, choosing an electric model proves to be more cost-effective than its combustion-engine equivalent.
Through us, users can also benefit from favourable purchasing terms and attractive offers that we are able to secure with manufacturers and distributors.
When it comes to electric vehicles, with the second-hand market still in its infancy, resale value is often a cause for concern…
Yes. In this respect, operating leases also offer a reassuring solution. With this option, customers do not have to bear the risk of vehicles depreciating in value as a result of technological advances.
Generally speaking, the market is maturing. Recent launches and announcements from manufacturers, particularly those involving more affordable vehicles, show that electric vehicles are establishing themselves not merely as an alternative, but as the market standard.
For further information, see the Arval Luxembourg website.