Automotive News Europe — 2025-01-23
Automotive Industry
Volkswagen Group estimated it will take a €1.5 bn ($1.6 bn) hit this year from stricter European Union standards for car emissions that the automaker will struggle to meet.
The anticipated costs include potential penalties for exceeding the EU’s tougher emissions target, Rolf Woller, VW’s head of investor relations, told analysts on a call on 22 January 2025.
The company also expects earnings to be eroded by having to sell more electric vehicles at the expense of more profitable combustion-engine models.
The EU’s 2025 CO2 emissions targets are about 15% lower than the 2021 levels, and experts say automakers will have to sell at least 20% full-electric vehicles even as EV sales growth stagnates.
Missing the target results in a fine of €95 ($98) per gram of CO2 over the limit per vehicle.
Some carmakers and lawmakers have urged the EU to review its emissions standards as the auto industry struggles with disappointing EV demand and an influx of Chinese competitors.
The emissions rules benefit US carmaker Tesla, which will be compensated for pooling the fleet of EVs it sells this year. Stellantis, Ford and Toyota plan to buy credits from Tesla, while Mercedes-Benz will buy credits from Volvo and Polestar.
After a difficult 2024, VW’s outlook for this year is clouded by its namesake brand lacking any new EVs to offer. This will complicate CEO Oliver Blume’s bid to restructure the industrial behemoth, which is reeling from overcapacity and intensifying competition.