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Volkswagen and Ford risk high fines for failing to meet CO2 reduction targets.

Volkswagen and Ford are the vehicle manufacturers most exposed to sanctions because they are far from meeting the CO2 reduction targets set by the European Union (EU) for the year 2025, according to a study published by the data consultancy Dataforce.

The report titled „Electrification or Failure: How OEMs Can Meet CO2 Targets for 2025“ reminds us that in 2025, the EU will significantly tighten the CO2 targets for car manufacturers. For passenger cars, the average emissions of new vehicle sales must fall below 93.6 g/km, compared to 116 g/km in 2024, representing a 19% reduction. For light commercial vehicles (LCVs) up to 3.5 tons, the targets will be reduced from 185 to 154 g/km, a 17% reduction.

Therefore, Dataforce warns that exceeding these CO2 limits can result in hefty fines, calculated by multiplying the excess CO2 in g/km by the volume of registrations by 95 euros. For large OEM groups, this could mean fines in the hundreds of millions of euros.

The situation for the next year looks worrying for most automotive groups in the EU, as among all manufacturers with internal combustion engines in their model range, only Geely (Volvo, Polestar) and SAIC Motor (MG) are below the 93.6 g/km threshold. Following them, Toyota (105 g/km) and BMW (106 g/km) require a comparatively moderate reduction, but all others (Stellantis, Renault, Nissan, Mitsubishi, Hyundai, Daimler) will have to make significant efforts to comply.

It is clear that the automotive industry is facing a crucial challenge in meeting the stringent CO2 targets set by the EU for 2025. Manufacturers like Volkswagen and Ford will need to accelerate their electrification efforts to avoid hefty fines and stay competitive in the evolving market. The transition to electric vehicles is not only a regulatory requirement but also a strategic move towards sustainability and innovation in the automotive sector.

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