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Manufacturers face ‘fines into the billions’ over EU emission targets

EU emissions test

Eight manufacturers will face fines running into the billions in 2021, due to a failure to meet EU CO₂ emissions targets, PA Consulting Group’s annual forecast reports.

PA’s 2017 ranking analysis shows that only four out of 11 carmakers are forecast to meet the stringent EU 2021 CO2 emission target, with Ford, BMW, Volkswagen, Fiat Chrysler, PSA Group and Hyundai-Kia predicted to face significant fines.  

The penalties amount to €95 for every gram of CO₂ above the limit, multiplied by the number of cars they sell in 2020. These fines could reach or rise above the €1bn mark for carmakers.

Consulting Group’s head of automotive Thomas Goettle (pictured) said: “Carmakers across Europe need to make radical changes in order to meet the EU CO₂ emissions targets for 2021.

“Many of them need to focus now on developing new models that will appeal to the consumer and help them meet their targets.

“There is nothing less than a revolution facing the car industry and those manufacturers who fail to keep up face potential fines in the billions.“

At the current rate, Volkswagen is expected to face the biggest fine of €1.7bn, followed by Fiat Chrysler with €1.2bn.

PSA Group was set to meet EU emissions targets, but turn red this year, following the merger with Opel and Vauxhall.

This affects their forecast until 2021. In addition, German carmakers, VW and BMW face higher penalties and are still suffering from bigger gaps in CO₂ performance for 2021, primarily due to the decline of diesel in their portfolio without direct alternatives in place today.

At the other end of the scale, there have been some positive developments, with Volvo, Toyota, Renault-Nissan and Jaguar Land Rover expected to meet the EU emissions targets.

Volvo is a new number one, up from seventh last year.

This is based on their strategy to not sell any more cars with combustion engines from 2019 onwards, which has resulted in a huge improvement in CO₂ performance ahead of 2021.

Jaguar Land Rover turns from amber to green for the first time now for 2021, achieving their specific target based on good progress for CO₂ performance in their fleet portfolio.

Toyota remains number two, but also with significant improved CO₂ performance for 2021.

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