EU car lobby wants emission targets watered down, as EV market stagnates
EU rules requiring automakers to achieve overall CO2 fleet emission of 95 grams per kilometre by next year would force them to either halt production of about 2 million cars or be exposed to fines that could reach €13 billion ($14.3 billion) for passenger cars and another €3 billion for vans, according to estimates by industry association ACEA.
Average CO2 emissions from all new cars registered in Europe in 2023 decrease 1.4% to 106.6 g/km, according to data from the European Environment Agency.
The EU is in a crisis caused by low consumer demand for EVs and unfair competition from third country EV manufacturers, meaning that the EU industry will not be able to meet these reduction targets,
the informal draft seen by Bloomberg said.
ACEA said that the industry's response could be little else than to slash production and threaten millions of jobs in the process, not only harming consumers, but also delivering a blow to EU's competitiveness and economic security.
Renault CEO and ACEA President Luca de Meo has already started speaking up to raise awareness of potential billions in euros in fines the car industry faces due to a slowdown in EV demand, meaning most manufacturers won't be able to meet stricter EU CO2 rules as of next year.
In an interview with French radio on Saturday, he said that the European Commission should show "a bit of flexibility" on the upcoming targets.
"The continuous trend of a stagnating market share of battery electric cars sends an extremely worrying signal for industry and policy makers.
The EU automotive industry has invested billions in electrification to put vehicles on the market, but the other necessary ingredients for this transition are not in place and the competitiveness of the EU is eroding.
"As a result, the transition to zero emission is highly challenging, with concerns about meeting the 2025 CO2 emission reduction targets for light-duty vehicles on the rise," ACEA said on its website on Thursday.
"The EU is still missing crucial conditions for the mass market adoption of zero-emission cars and vans: charging and hydrogen refilling infrastructure, as well as a competitive manufacturing environment, affordable green energy, purchase and tax incentives, and a secure supply of raw materials, hydrogen and batteries," ACEA added.
For the overall EU auto market to be compliant with the stricter 2025 emissions rules, the EV share of passenger cars and vans should be about 20% to 22%, while the level has currently stagnated at less than 15% for cars and much lower for vans, according to the draft.
Volkswagen is in the worst position of all European carmakers to meet stricter CO2 rules in 2025, Jefferies analyst Philippe Houchois wrote in a note this month.
Longer term, the EU plans to phase out sales of new vehicles with internal combustion engines by 2035, with a review of the target due in 2026.
Cover photo: Canetti via Getty Images
