Various Mercedes-Benz cars are assembled in the production hall “Factory 56”.
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Car manufacturers have a number of ways to mitigate the impact of the EU Stricter emissions targetsAlthough analysts say all options are likely to come at a significant cost.
The prospect of heavy fines for non-compliance with new EU emissions standards has caused a stir Hot discussion In the automotive industry, especially since this sector is at the present time Not on the right track To achieve this year's goal.
A perfect storm of challenges on The path to full electricity Major original equipment manufacturers (OEMs) are guaranteed to have a tough time in 2024 – and few expect 2025 to be much better.
The EU cap on average emissions from new car sales falls to 93.6 grams of carbon dioxide per kilometer (g/km) in 2025, reflecting a 15% decline from the 2021 baseline of 110.1 g. / how much.
Go beyond those limits – which were agreed in 2019 and form part of the 27-nation bloc’s ambition to reach Climate neutrality by 2050 – Could result in fines amounting to several billion euros.
“Everyone is in the dark about this issue,” Rico Lohmann, chief economist for transport and logistics at Dutch bank ING, told CNBC via video call.
“It's a big deal because they're still struggling to bring about transformation and restructuring, as we've seen with everything that's going on Volkswagen “Over the past two weeks and months while the organization was adjusting to the new world,” Loman said.
“There is a long-term interest in keeping up with competitors. I mean the direction of travel is very clear. So, eventually, they will have to make it happen, but in the short term, it's not attractive.” “For them because it hurts them in so many ways,” he added.
What action can be taken?
Most of Europe's major carmakers are currently far from reaching the EU's new CO2 target, meaning action is necessary to mitigate the impact of financial sanctions, ING's Lohmann said.
Some of the options on the table include increasing sales of battery electric vehicles (EV) by introducing more affordable models and lowering prices, reducing production of traditional internal combustion engines (ICE) in favor of electric vehicles and hybrid models, and “bundling.” With competitors who are already committed to the goal. Alternatively, car companies can simply pay the fines.
Aggregation refers to the process by which vehicle manufacturers collaborate to be considered a single entity when calculating their performance against a CO2 emissions target.
Nowadays Sweden Volvo It is believed to be the only large automaker to have been able to comply with this target, alongside the US electric vehicle manufacturer Tesla And some Chinese companies.
The Volvo logo is seen on the front bumper of a car at the Volvo Car Dealership in Austin on September 4, 2024 in Austin, Texas.
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Steven Reitman, head of European automotive research at Bernstein, said automakers operating in Europe face a “massive abyss of emissions” this year due to tightening EU regulations.
“They can now mitigate that by collaborating with companies that have excess greenhouse credits,” Reitman told CNBC. “But those companies are one company, Tesla, and the other big company is Volvo, which is owned by (Chinese) Geely.”Squawk Europe Fund” Thursday .
“And a lot of the cars that Tesla sells in Europe, which generate greenhouse credits, come from China. So, basically, you see European automakers' money being transferred to Chinese entities or to companies that originated in China, which is probably not the appearance,” he added. “What is best for the European Union and national governments.”
Hot discussion
Some European OEMs have it He expressed his concern About tightening carbon regulations in Europe, especially as demand for electric cars falters.
The Association of European Automobile Manufacturers (ACEA), an industry lobby group, has done just that Named The European Commission called for “urgent relief measures” regarding the new rules, while German Chancellor Olaf Scholz called for… He said Fines should not be imposed on car companies that do not comply with the new standards.
Joint press conference of European Commission President Ursula von der Leyen, European Council President António Costa and Hungarian Prime Minister Viktor Orbán after the conclusion of the European Council Summit EU leaders' meeting at the EU headquarters in Brussels, Belgium on 19 December 2024.
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For some, any move to ease or delay the EU's tougher carbon rules would be tantamount to scrapping the regulation altogether.
Julia Poleskanova, senior director of vehicle supply chains and e-mobility at the Transportation and Environment Group, told CNBC last month that the rules are designed to help make automakers more competitive — even if it comes at the expense of some of their higher-ups. Profit margins in the near term.
“We're behind on electricity. So how can we delay the target and put us further behind in helping industry? I don't understand it. I don't understand how that helps with the transition they have to go through.” Poleskanova said.
European Commission President Ursula von der Leyen He said She said late last year that she would hold a strategic dialogue on the future of the automotive industry in Europe.
The dialogue, scheduled to be officially launched this month, aims to quickly implement measures that the sector urgently needs.
