Europe's automotive industry faces possible USD17.4B fines for delayed sales of EVs
(MENAFN) Europe's automotive sector is at risk of incurring significant fines, potentially reaching up to €15 billion (USD17.4 billion), as the demand for electric vehicles (EVs) slows, warned Renault's Chief Executive Luca de Meo on Saturday. De Meo, who also serves as president of the European Automobile Manufacturers Association, emphasized the urgency of accelerating the adoption of electric vehicles to meet stringent carbon emission targets set by the European Union. Starting in 2025, the EU's regulations will lower the permissible average carbon emissions from new vehicles sold to 94 grams per kilometer, down from 116 grams per kilometer in 2024. This reduction represents a substantial challenge for carmakers, who must significantly increase their EV sales to avoid hefty fines.
During an interview with France Inter radio, De Meo highlighted the grim scenario that could unfold if electric car sales do not pick up pace. He stated that if the current rate of EV adoption continues, the European auto industry could face fines of up to €15 billion or be compelled to halt the production of more than 2.5 million cars to comply with the emission limits. De Meo further elaborated that the current speed of transitioning to electric vehicles is only about half of what is required to meet the upcoming targets, underscoring the need for a dramatic increase in the uptake of EVs to avoid financial penalties.
The potential fines would not only affect the industry as a whole but could also result in penalties amounting to hundreds of millions of euros for major car manufacturers individually. These penalties loom large as a consequence of failing to meet the EU’s stricter carbon emissions standards, which are set to become even more challenging in the near future. As the market faces slowing demand for EVs, automakers are under mounting pressure to ramp up their efforts to shift towards cleaner vehicles and reduce their overall carbon footprint to comply with the upcoming regulations.
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