Manufacturers speak out over missing EU Commission CO2 targets by 2021

16 January 2018

Manufacturers speak out over missing EU Commission CO2 targets by 2021

16 January 2018

Two of Europe’s largest vehicle manufacturers have spoken about the difficulty of achieving the continent’s strict CO2 targets that are due to be achieved by 2021.

Car manufacturers are heading for large fines as they are set to fail legally mandated CO2 targets of 95 grams per kilometre, which could lead to large fines being handed out. The collapse of the diesel market across Europe, together with the rise in sales of heavier SUVs has not aided the promotion of cleaner vehicles to achieve these results.

Speaking at the Detroit motor show, Dieter Zetsche, chief executive at Daimler, said the company is likely to miss the target, mainly due to the poor uptake in the electric vehicle market as the diesel segment falters. ‘It’s the only way that we’re going to make the numbers,’ he said, adding that while the company will do its best to meet targets, ‘not every parameter is under our control.’

Sergio Marchionne, chief executive of Fiat Chrysler Automobiles (FCA), said government mandates for electric car sales were required for carmakers to comply with the rules.

Diesel vehicles have been vilified by governments and the media since the Volkswagen Dieselgate scandal broke in 2015. Stories of high nitrogen oxide (NOx) emissions have led to an epic collapse in the market since, especially during 2017. Predictions suggest the downturn will continue, while petrol market grows. Last year was the first since 2009 that sales of these vehicles outnumbered diesel.

However, petrol cars emit more CO2 than diesel. The answer seems to be in the electric market. Sales of electric vehicles (EVs) remain slow in Europe, with much of the market currently driven by government incentives. The industry believes a fall in battery prices and a larger number of charging points are also required before the vehicles become as attractive to motorists as internal combustion engine cars.

Companies that miss the targets risk a fine of €95 for every gram they go over. At present, Daimler could be facing a total fine of around €200 million, while BMW could face the highest penalty with a €500 million outlay. Of all manufacturers, only Volvo, Toyota, Renault Nissan Alliance and Jaguar look like achieving the 2021 figures. PSA Group was also on target to meet the figures. However, its acquisition of Opel has changed this.

Marchionne said the potential fines were so severe that carmakers might be forced to stop selling some models to comply. ‘We’ll just stop selling cars,’ he said, before adding that FCA will meet the targets and so will not have to stop sales.

Zetsche added that missing the targets may also cause a public backlash that would harm manufacturer reputation.

Manufacturers are pushing EV development to achieve future targets set from 2021 onwards, with VW investing up to €70 billion in a number of new models, and Ford announcing an $11 billion (€9 billion) investment in the technology.