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European Car Manufacturers Face Risk Of Paying Huge Fines
You’ve probably wondered lately why car companies present in Europe are obsessed with various hybrids and electric vehicles. The thing is, first of all, that they want to protect themselves from heavy penalties related to excessive emissions. For each excessive gram of CO2 within their fleets, car manufacturers pay 95 euros.
Someone will say, okay, that’s not so much when we consider dealing with such giants (with deep pockets) as the Volkswagen Group or Stellantis. However, these penalties tend to accumulate, as they are applied to each car sold. In translation, it is about huge sums that are reflected in hundreds of millions of euros, in case the sale of hybrids and electric cars is not enough to compensate for the sale of models with a conventional drive.
This is also one of the reasons why the so-called “downsizing”, i.e., reducing the working volume and number of engine cylinders, has become the rule in Europe and is not the exception.
The proliferation of smaller, electrified powertrains has a global impact, as Europe is one of the most important regions for the automotive industry. Car manufacturers have to adapt to strict regulations in the EU, affecting the development of new cars and engines.
The current fleet target for emissions, which is 115.1 g/km (based on the WLTP cycle), will be reduced by around 19 percent to 93.6 g/km in 2025, which puts most car manufacturers at risk.
Research conducted by analytics company Dataforce points to a worrying future for many companies that sell vehicles in Europe. In June 2024, only Tesla and Geely were below the fleet average that will take effect in 2025.
According to the European Commission, each company has its target, calculated based on the average weight of its fleet. In other words, companies that sell more SUVs have higher goals than those with mostly smaller vehicles. In 2020, car manufacturers paid around 510 million euros for not meeting the targets related to the reduction of carbon dioxide emissions, and it should be borne in mind that the regulation was more relaxed.
