Automakers paid $550M in EU emissions fines in 2020, figures show

European automakers paid about €510 million ($552 million) in fines for missing their 2020 CO2 emissions reduction targets, the first year of stricter limits that required significant sales of full-electric and hybrid vehicles, according to European Union figures seen by Automotive News Europe.

Among the bigger companies that paid fines were Volkswagen Group and Jaguar Land Rover, but the final total was not publicly reported. VW Group said it had paid more than €100 million in fines for missing its 2020 target by just 0.75 grams per km, while JLR said in October 2021 that it had paid a fine of £35 million, or about €40 million, after missing its target by about 3 grams/km.

Other manufacturers that missed their target in 2020 were Suzuki, Subaru, Bentley, DR Motor, Lamborghini and McLaren, as well as SsangYong light-commercial vehicles. 

The amount of fines paid by each automaker could not be precisely determined.

Suzuki missed its target by 10.4 g/km, according to EU figures, translating to a fine of nearly €1,000 per vehicle. With 160,570 registrations counting toward the target, fines would be about €160 million euros.

Subaru missed its target by 34 grams, or a fine of €3,230 per vehicle. With 16,176 registrations, fines would be about €52 million. 

Suzuki and Subaru spokespeople did not respond to requests for comment.

The 2020 CO2 target was 95 grams per km on the old NEDC test cycle, or about 120 g/km on the new WLTP cycle. Each automaker has a target based on mass, with heavier cars allowed to register higher emissions. Automakers that miss their target face fines of €95 per gram of excess CO2 on every car registered. Money collected goes into the EU general fund.

There are scores of entities that have individual targets, including regional subsidiaries, van or truck-making divisions, and high-performance units.

Most mass-market automakers have grouped their brands in emissions pools, while others have partnered in pools with competitors that sell a high percentage of battery electric vehicles. In 2021, JLR and Honda joined with Tesla, for example; VW Group and China’s SAIC, which sells the MG brand, were in another pool. 

The pooling strategy and an influx of BEV and plug-in hybrid sales helped nearly all automakers avoid fines in 2021. Only €10 million was collected that year, figures show. Companies missing the target included Ferrari and Bugatti, according to the European Environmental Agency.

The 2022 results, the latest available, were released by the European Commission on March 18. The only manufacturer of the 91 registered that missed its target was Bugatti, which sold 30 cars in Europe and is not subject to a fine.

The EC also released the gap to the target for each pool (see chart above). The Tesla-Honda-JLR pool was about 86 g/km below its target, because of Tesla’s EV sales; at the other end of the table were VW Group, about 3 g/km from its target, and Toyota-Mazda-Suzuki-Subaru, about 4 grams away. 

The next big step-down in emissions levels is 2025-29, when the fleet average will be about 15 percent less, or an overall figure of 93.6 g/km on the WLTP cycle. From 2030-34, the figure will be 49.5 g/km, a 55 percent drop over 2021. Starting in 2035, only zero-emission vehicles can be sold in the EU.
 
But the slowdown in BEV sales has complicated the situation for automakers, which may have to bank on higher sales of costly plug-in hybrids to hit their targets. From 2020 to 2022, fleet emissions fell steadily: by 12 percent in 2020, 13 percent in 2021 and 5.3 percent in 2022, as the share of full-electric cars reached 14 percent in 2022.

That pace of emissions reduction may not be sustained this year. Preliminary figures from market analyst Dataforce for the first two months of 2024 showed that EV sales grew by 20 percent, down from a 28 percent all of 2023, but still ahead of the overall market's growth of 10 percent. At the same time, plug-in hybrid sales were up 11 percent after finishing flat in 2023.