Tuesday, 26 September 2017

Automakers face big fines for missing targets

PA Consulting's recent report shows that many major automakers will not meet the European Union's upcoming carbon dioxide emissions goal, resulting in large fines.

PA Consulting ranked automakers according to their progress in meeting the EU's target to reduce CO2 emissions of new cars sold in Europe to a fleet average of 95 grams per km in 2021 from 118 g/km last year.

Just three of 11 automakers -- Volvo, Toyota and Renault-Nissan -- are in position to reach that goal, it found. Automakers who fall short will face fines of €95 per gram over the limit for each vehicle.

CO2 penalties

Fines automakers could face in 2021

VW Group : €1.36bn

FCA: €950m

PSA/Opel: €786.7m

BMW: €430m

Ford: €307.1m

Hyundai-Kia: €283.1m

Daimler: €126.2m

The targets are sure to have influenced the raft of hybrid and electric vehicles currently on offer with automakers pushing sales but 'very few are likely to be able to change the makeup of their fleets fast enough to meet the immediate challenge of the 2021 EU CO2 emission reduction targets, and avoid the significant fines for missing them,' PA Consulting said.

Companies will do 'everything humanly possible to avoid paying the fines,' said Thomas Goettle, the author of the report and lead automotive analyst at PA Consulting. 'It's on the top of the agenda at the OEMs,' he said.

Among other carmakers, the report found:

• Ford, in sixth place, will 'struggle' to meet its target, with almost no electric vehicles in its lineup.

• VW Group climbed to seventh from ninth, and has announced a major investment into electric vehicles. Offsetting that in the short term will be a push to sell profitable SUV and crossover models.

• Fiat-Chrysler, in eighth place, 'is likely to miss its targets by the highest margin of all the carmakers,' about 10 g/km, the report said, citing 'a lack of alternative powertrain options and strategy.'

• Daimler sits in ninth place, but is 'moving fast,' announcing its EQ line of electric vehicles and positioning Smart as an electric brand.

• BMW, in 10th, was an early EV mover with the i subbrand, but sales numbers 'have not been sufficient to significantly decrease CO2 fleet emissions,' the report found.