OEMs face fines for missing emissions targets

November 29, 2016

Eight of Europe’s biggest carmakers could face billions of euros in fines for missing EU emissions targets that come into force in 2021. According to PA Consulting BMW, Daimler, Fiat Chrysler Automobiles, Ford, General Motors, Hyundai-Kia Motor Company, Jaguar Land Rover and Volkswagen Group are all in danger of missing their targets.

PSA Group, Renault-Nissan Alliance, Toyota and Volvo, on the other hand, were considered to be on track to meet their carbon dioxide (CO2) emissions target because they have made most progress towards adding electric vehicles (EVs) to their ranges.

Figure 1: Carmakers ranked by forecast 2021 carbon dioxide emissions

Manufacturers have to reduce average CO2 emissions to 95g/km by 2021. Each brand has specific targets to reflect its vehicle range, so that manufacturers of off-road vehicles have a higher emissions target than a manufacturer which mainly produces superminis.

In its report, The CO2 Emissions Challenge, PA Consulting ranks OEMs according to their current and predicted emissions performance.

Thomas Goettle, head of global automotive at PA Consulting, said: ‘We know they need electric cars to hit the numbers otherwise they have no chance. There are some that can still make it, and others that are struggling quite a lot.’

OEMs recently revealed strategies to slash emissions by introducing a range of new EVs, but Goettle says they won’t arrive quickly enough to affect their average emissions in 2021.

Volkswagen has already stated that it plans to have 30 new EVs in its range by 2025 as part of a massive restructuring and Daimler has announced plans for 10 new EV models over the same period.

Executives at Volkswagen say they ‘remain committed’ to achieving the EU emissions targets for CO2 as part of its new strategy.

Jaguar Land Rover recently unveiled a new electric SUV as it pushes forward with plans to create thousands of new jobs by developing zero-emission models.

The diesel emissions scandal has undermined manufacturers’ plans to use diesel cars as the best solution for reducing CO2 emissions. Some EU governments are discouraging use of the fuel and its share of the market is falling.

Furthermore, the EU is also targeting a reduction in nitrogen oxides, which tend to be higher in diesel engines, requiring manufacturers to spend more on exhaust treatments.

While companies such as PSA Group insist that diesel has a long-term future, the biggest reductions in average CO2 will come from EVs and plug-in hybrids, which are typically powered by petrol.

Goettle added: ‘The problem is, these vehicles will come too late to have an impact on the rapidly approaching 2021 deadline. Carmakers must move beyond hybrids. They need to radically reshape their vehicle portfolio now if they are to reduce and meet their emissions targets for 2021.’

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