Dutch Government Mandates Electric Cars for Businesses by 2027
The Hague, Sunday, 27 April 2025.
From 2027, Dutch companies will be fined for offering fossil-fuel cars to employees, pushing for a shift to electric vehicles. This policy aims to enhance green growth and sustainability.
Significant Tax Penalties for Non-Compliance
Under the new measures announced by Climate Minister Sophie Hermans on April 25, 2025, companies will face a substantial tax penalty if they continue offering fossil fuel vehicles for private use after 2027. The penalty will amount to 52% of the addition rate (22%) of the vehicle’s catalog value [1]. For example, a company providing a €10,000 fossil fuel vehicle would incur an annual penalty of €1,144, which cannot be passed on to employees [1].
Electric Vehicle Market Growth
The timing of these measures comes as electric vehicles are gaining significant market share across Europe. In the first quarter of 2025, battery-electric vehicles captured 15.2% of the EU market, representing a notable increase from 12% in the same period of 2024 [4]. The Netherlands has shown particular strength in this transition, with a 7.9% increase in battery-electric vehicle registrations during this period [4].
Additional Support Measures
To further incentivize the transition, the Dutch government is implementing additional measures to make electric vehicles more affordable. Starting in 2026, electric vehicle owners will receive a 30% reduction in road tax, an increase from the previously planned 25% [1]. The government is also reforming the tax structure to base vehicle taxation on size rather than weight, a change that will particularly benefit electric vehicles, which typically carry heavier battery systems [3].
Infrastructure and Future Outlook
These initiatives align with broader European Union goals, which mandate that no new fossil fuel vehicles can be sold in the EU from 2035 [1]. However, challenges remain in charging infrastructure development [6]. Despite the Netherlands being among Europe’s leaders in charging infrastructure, with four Dutch cities ranking in the top five for charge point availability, citizens continue to voice concerns about insufficient charging locations in residential areas [6].