PARIS -- Volkswagen Group CEO Martin Winterkorn warned European regulators that it would be "fatal" to overburden the auto industry with tougher CO2 emission targets before a market can develop for electric cars, plug-in hybrids and other fuel-efficient models powered by alternative powertrains.
Automakers are reluctant to develop cars equipped with expensive green technology when customers prove unwilling to pay for it.
“Every gram of CO2 that we save in our European fleet costs our group almost 100 million euros -- 100 million that we have to invest in advance, without knowing when these investments pay off,” Winterkorn said.
“That’s why I worry when Brussels already now starts to cry out for new, more stringent norms for the time after 2020," he said on Wednesday at a press event ahead of the Paris auto show.
Winterkorn warned about the dangers the auto industry is facing due to an ambitious European Commission that he feels is getting ahead of itself in regulating new targets beyond the 95 grams of CO2 per kilometer agreed for 2020.
Volkswagen has said it aims to reduce its CO2 exhaust in its new European fleet to 95g/km by then, after managing to lower emissions to less than the 130g/km mark for the first time in the past year.
Each carmaker selling cars in EU has a specific weight-based target they need to reach an overall fleet goal of 95g/km. Automakers that miss their targets face fines from the European Commission.
Investment must generate profit
Winterkorn said regulators should accept that carmakers can only make investments when they generate enough profit. "It’s too early for concrete targets. Taking the third step before the first would be fatal,” he warned, urging policymakers to work together with carmakers to develop electric cars and plug-ins.
“We cannot allow Europe’s companies to be impeded in global competition and this danger has never been greater,” he said.
Volkswagen said it may sell over 7.5 million cars in the first nine months of this year and is well on its way to reach its 10 million unit target in 2014, four years ahead of schedule.