‘Carmakers to pay €14 billion in CO2 fines’
According to a study from PA Consulting, the thirteen carmakers active in Europe will have to pay 14 billion euros in CO2 fines in 2021. PA adds that to keep emissions under the 95 g/km limit, EV sales should increase by 1 280%.
2020 is already an exciting year for the automotive sector. Most major car manufacturers are jumping on the electric or plug-in hybrid bandwagon, and new, supposedly greener vehicles should continue to arrive in dealerships. However, while the major part of the carmakers ensures that they will meet the EU target, independent PA Consulting argues otherwise.
Major changer required
PA Consulting observes that even after four years of constant enhancement in terms of powertrains and hybrid or electric technologies, emissions have risen in 2018. The high demand for sturdy and heavy cars, such as SUVs, and the switch from diesel to gasoline are the primary culprits.
The consulting firm has looked at the numbers and they don’t add up. It argues that promised electric and hybrid sales wouldn’t take off as manufacturers hope and CO2 emissions will pretty much stay at the same level.
14 billion euros
According to the study, the Volkswagen Group will take the biggest blow. While it invested €44 billion in the EV race, PA Consulting finds out that VW will have to pay €4,5 billion in fines if its emissions stay at 121,1 g/km.
FCA will take second place with a bill of 2,4 billion euros for its average of 125,4 g/km. Then comes Ford with 1,45 billion, and the Renault-Nissan-Mitsubishi Alliance with one billion for an average of 108,2 g/km. PSA should pay 938 million.
As the study points out, the CO2 fines won’t necessarily penalize carmakers with the highest average of emissions – such as JLR, Mazda, or Daimler – but those with a combination of high emissions and high sales.
EV sales should increase by 1 280%
To put things into perspective and bring some of the marketing ambitions back down to earth, PA Consulting calculates that, to reach the CO2 average, sales of EV should increase by 1 280% to 2,5 million cars. This is next to impossible.
To stay between the lines, VW should increase its 100 000 ID 3 per year production capacity by 26. With this study, PA Consulting also sounds the alarm bell as reaching the 2020 CO2 reduction is essential to reach the future 2025 and 2030 goals.