Renault Group CEO Luca de Meo said the European auto industry may face a 15 billion euro ($17.4 billion) fine for carbon emission overruns due to a slowdown in demand for electric cars, Reuters reported.
By 2025, automakers in the European Union will face stricter CO2 emissions targets. Compared to the limit of 116 grams of CO2 emissions per kilometer that will come into effect in 2021, the EU has set the average CO2 emissions for new cars on sale in 2025 to be 93.6 grams per kilometer.
In an interview with France Inter radio on Sept. 7, de Meo said, “If electric cars [demand] remain at current levels, the European auto industry may have to pay a fine of 15 billion euros or reduce production by more than 2.5 million units.” de Meo pointed out that the growth rate of electric vehicles in Europe would need to double if the target is to be met and no fines paid.
If a vehicle’s CO2 emissions exceed the standard, automakers will be fined 95 euros per kilometer per gram, which, multiplied by the number of vehicles sold, could result in large automakers facing hundreds of millions of euros in fines.
De Meo said, “Everyone is talking about 2035 in 10 years’ time, but we should be talking about 2025 because we’re already having a hard time now.” The EU has set a deadline for selling only zero-emission cars, “but we need more flexibility. Setting deadlines and fines but not being more flexible is very, very dangerous.”
In August, a report by data analytics firm Dataforce said that carmakers would have to dramatically increase sales of purely electric and hybrid vehicles, despite “market skepticism” that the EV 2025 target would be met.Dataforce said Ford and Volkswagen Group were on track to meet the EU’s Ford and Volkswagen have the biggest gap to the EU’s 2025 carbon emissions target, Dataforce said.
In contrast, while Toyota has low sales of pure electric vehicles, it has high sales of low-emission hybrids and is therefore closest to the EU’s 2025 CO2 emissions target. In addition, Geely and Tesla already meet the EU’s 2025 target for emissions from their vehicles. Of these, Tesla easily meets the target due to its sales of only zero-emission pure electric vehicles, while Geely meets the target thanks to pure electric vehicle sales of its Volvo cars.