Europe’s Auto Industry at Risk of Fines

PARIS (Reuters) – Europe’s autos industry could face fines of 15 billion euros ($17.4 billion) for carbon emissions due to slowing demand for electric vehicles, according to Renault CEO Luca de Meo.

Automakers are facing tougher EU CO2 targets in 2025, as the cap on average emissions from new vehicle sales will decrease to 94 grams/km from 116 g/km in 2024.

De Meo stated, “If electric vehicles 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 vehicles.”

He further explained, “The speed of the electric ramp-up is half of what we would need to achieve the objectives that would allow us to avoid fines.” De Meo is also the president of the European Automobile Manufacturers Association (ACEA).

Exceeding CO2 limits can lead to fines of 95 euros per excess CO2 g/km multiplied by the number of vehicles sold, potentially resulting in penalties of hundreds of millions of euros for large carmakers.

Despite the focus on 2035, De Meo emphasized the urgency of addressing the 2025 targets, stating, “We need to be given a little flexibility. Setting deadlines and fines without flexibility is very dangerous.”