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January 21, 2021 08:08 AM

VW faces EU fine for missing 2020 emissions targets

Reuters
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    BERLIN -- Volkswagen Group faces a fine of more than 100 million euros ($121 million) for missing its 2020 European Union target for CO2 emissions.

    VW Group - including the VW, Audi, Porsche, and Skoda brands - cut average CO2 emissions in its new cars sold in the EU last year by about 20 percent to 99.8 grams per km, but that was around 0.5 g/km above its target, VW said in a statement on Thursday.

    That implied EU fines amounting to a "very low triple-digit million amount," a VW spokesman said.

    "We narrowly missed the fleet target for 2020, thwarted by the COVID-19 pandemic," CEO Herbert Diess said in the statement

    Diess said he hoped to meet the target this year as the company's main brands bring out new electric models.

    VW Group's core VW brand and Audi met their targets, largely due to the launches of the VW ID3 and Audi e-tron electric models. VW did not mention whether its Porsche, Seat and Skoda brands met their emissions goals. It said the emissions of Bentley and Lamborghini are measured individually and are not included in the group figure of 99.8 g/km.

    VW is reducing the combustion-engine cars it offers and retooling more factories to build electric vehicles in an effort to keep up with electric-car maker Tesla.

    It has said the EU's more stringent emissions targets will force it to boost the proportion of hybrid and electric vehicles in its European car sales to 60 percent by 2030, up from a previous target of 40 percent.

    VW is also pooling its CO2 emissions with electric automakers MG Motor, Aiways, LEVC and Next E.Go Mobile in a pooling arrangement that is allowed by EU regulators.

    VW had already warned in third-quarter earnings call on Oct. 29 that it expected EU penalties for failing to achieve its CO2-reduction target.

    The automaker expects to have an easier time meeting its 2021 target, thanks to ramped-up production of new full-electric models on the MEB architecture, especially the VW ID4 and Skoda Enyaq compact crossovers.

    European policymakers have clamped down on exhaust emissions, forcing automakers to spur development of low-emissions technology or face a penalty of 95 euros per gram of excess CO2 they emit.

    VW admitted in 2015 to cheating emissions tests on diesel engines, a scandal which has cost it more than 30 billion euros ($33 billion) in regulatory fines and vehicle refits, mostly in the U.S.

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