Sales of electric cars have stagnated in Europe. However, manufacturers will have to increase them dramatically, as well as those of plug-in hybrids, if they want to meet the CO2 emissions targets set by the European Union for 2025, according to a report by the analysis company Dataforce.
In 2025, the average emissions of the fleet of new cars sold in the EU from each manufacturer will be 93.6 g/km CO2. This is a significant drop from the 116 g/km limit that came into force in 2021. Note that this target figure varies depending on the average mass of each manufacturer’s range (sold). Thus, brands such as Mercedes and BMW, which sell more large SUVs, have higher targets than brands that sell smaller cars with smaller engines and lower emissions, such as Dacia or Citroën.
The fine is not minor. The EU punishes brands that do not meet their objective with 95 euros per car for each gram of excess. Although almost all brands met their targets on time, manufacturers paid 550 million euros for not meeting their 2021 targets.
Who is closest to fines
Of the major European car groups, only Geely and Tesla are already below their 2025 targets. In Tesla’s case, it’s obvious: it only sells electric cars. Geely has Volvo, with many electric and plug-in hybrid cars, plus the support of Polestar (which doesn’t sell much, but is focused on 100% electric cars).
There are manufacturers that are approaching the goal, such as Toyota (with few electrics in the range but with many low-emission hybrids), the Group Hyundai-Kia or the German premium ones, like BMW either MercedesIn these last three cases, electric vehicles form an important part of their ranges (although they still sell quite a few combustion vehicles).
Stellantis and the Renault Group are lagging behind, although the arrival of new entry-level electric cars (such as the Renault 5 or the Citroën ë-C3) should help to lower these figures. According to information from Dataforce, Ford and Volkswagen are going to suffer the most.
VW Group CEO Oliver Blume warned earlier this year that the EU should tighten its CO2 targets due to the slowdown in sales of zero-emission cars. He also said that Volkswagen could join forces with more efficient manufacturers to reduce emissions from its fleet (there are currently no agreements in this regard).
BMW CEO Oliver Zipse also called for a review of the targets, as did Renault Group CEO Luca de Meo in an open letter to regulators. Despite the number of launches and investments in 100% electric models, the market has turned its back on them. In the first half of the year, they accounted for just 13.3%, half a point lower than in the first half of 2023.
Letter solutions to 2025
Will conventional hybrids be the solution? We say this because in the first half of this year, the European market grew by 4.3% (234,000 units), and half of the new volume came from non-plug-in hybrids. Although electric and PHEV vehicles reduce emissions more, subsidies have been cut in some countries and their sales have noticed this.
And beware, there are signs that sales of plug-in hybrids will slow down, especially as the EU pushes for greater control of the utility factor (the percentage of time a plug-in hybrid is running in all-electric mode). They have been found to run on the combustion engine far more than emissions certification tests predict, according to a study by Transport & Environment.
Dataforce said an automaker with no full hybrids in its portfolio would need to sell 37% battery and plug-in electric vehicles… but an automaker selling 55% full hybrids could reduce that figure to 23%. High-emissions versions can also be phased out and technologies to reduce the cost of entry into electric cars, such as LFP batteries, can be implemented.
Analysts agree that, in this situation of possible fines, we must prepare for price increases for cars with internal combustion engines, while electric vehicles should start to become more affordable.
