Di Meo: ‘EU carmakers face €15 billion fine if EV sales stay low’

According to targets set in 2017, the EU requires carmakers to bring the average CO2 emissions of their newly sold car fleets below 93.6g/km by 2025. If this target is not met, they might have to pay €95 fine per gCO2/km over the target and per car sold.

But now Luca di Meo, CEO of Renault and President of the European Automobile Manufacturers Association (ACEA) warns in an interview with France Inter radio that this will be almost impossible if EV sales keep slowing down. This could cost the carmakers up to 15 billion euros in fines.

“We need to be given some flexibility,” he pleaded. “Simply setting deadlines and fines without having the possibility of making it more flexible is very dangerous,” di Meo added.

But critics riposte that carmakers should take the blame themselves, as they made little effort and keep on pushing cars on fossil fuels while launching mostly top-model EVs for their bigger margins, but which are too expensive for the man in the street.

Producing 2.5 million ICE cars less

“We are preparing for 2025 now because we are taking orders for the cars we will deliver. And there, according to our calculations, if EV sales remain at today’s level, the European industry may have to pay 15 billion euros in fines or give up the production of more than 2.5 million cars with a combustion engine,” he explained.

According to ACEA figures, that would be a big chunk of the 12.2 million passenger cars built in Europe in 2023, about 16% of global car production, and second after China.

Of these new cars registered, 35.6% were gasoline cars, 13.6% diesel cars, and only 14.6% battery-electric cars. HEVs or ‘classic’ hybrids accounted for 25.8%, but together, they still emit a lot of CO2 despite lower fuel consumption.

Pushing plug-in hybrids

Plug-in hybrids (PHEV), which the car industry is again heavily pushing as a ‘cure’ for people’s ‘range anxiety’ while revising their targets due to slowing BEV sales, accounted for 7.7% in 2023.

However, several studies have already shown that PHEVs, with their double drivetrains, are among the most expensive and least preferable solutions for meeting the EU’s environmental targets. Most emit far more CO2 than advertised, as people ‘forget’ to charge them and primarily drive on fossil fuels.

According to the International Council on Clean Transportation (ICCT) analysis, average emissions in the European Economic Area (EEA) have fallen to 107 gCO2/km in 2023.

Some carmakers, like Tesla and Volvo, are well under the 2025 requirements, and others, like the Stellantis Group and Kia, are close to or already meeting them with a 5% gap to close, according to a study by environmental lobbying group Transport & Environment (T&E) in a report published in April this year.

BMW, the best-seller in EVs in July in Europe recently, Hyundai, and the Renault-pool (with Nissan and Mitsubishi) have a gap of less than 10 g CO2/km and will need to continue to sell more EVs if possible.

The Toyota pool (with Subaru and Suzuki) pays the price for pushing its hybrid technology rather than BEVs, with a gap bigger than 10%. This is also the case for Mercedes-Benz, not for pushing HEVs, but rather selling many powerful premium ICE cars, with an almost 18% gap.

Others, like Volkswagen and Ford, are lagging with an average of 118 gCO2/km, having the most significant gap to close at 22 g/km and 24 g/km, respectively. These carmakers will need to double down on their efforts in 2024 and 2025, T&E said in April. But since, EV sales slowed down even more.