Automakers could face billions in fines for missing 2025 emissions target, Renault CEO says

PARIS -- Europe's auto industry could face fines of €15 billion ($17.4 billion) for excess carbon emissions due to slowing demand for electric vehicles, Renault Group CEO Luca de Meo said.

Automakers face tougher EU CO2 targets in 2025 as the cap on average emissions from new vehicles sales falls to 94 grams/km from 116 g/km in 2024.

"If electric vehicles remain at today's level, the European industry may have to pay €15 billion in fines or give up the production of more than 2.5 million vehicles," de Meo told France Inter radio on Sept. 7.

"The speed of the electric ramp-up is half of what we would need to achieve the objectives that would allow us not to pay fines," de Meo, who is also president of the European Automobile Manufacturers Association (ACEA), said of the sector.

Exceeding CO2 limits can lead to fines amounting to €95 per excess gram of CO2 per km multiplied by the number of vehicles sold.

That could result in penalties of hundreds of millions of euros for large carmakers.

"Everyone is talking about 2035, in 10 years, but we should be talking about 2025 because we are already struggling," he said. The EU has set that as a deadline to sell only zero-emissions cars.

"We need to be given a little flexibility. Setting deadlines and fines without being able to make that more flexible is very, very dangerous," he said.

A report in August from Dataforce said that automakers will have to sharply increase sales of full-electric and hybrid cars despite "market skepticism" for EVs to meet the 2025 targets. 

Ford and Volkswagen were the automakers that were farthest from meeting their target, Dataforce said.

Toyota, which sells low numbers of full-electric cars but a large number of low emission full-hybrids, is the closest to its 2025 target. the report found. Geely has already reached its goal, while all-electric Tesla has also qualified.