Major car brands risk £12billion fine for missing net zero goals as EV sales slow, Renault CEO says
The boss of Renault warned brands could face enormous fines
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The boss of one of the world's largest and most popular car brands is warning that manufacturers could face enormous fines if they cannot sell enough electric vehicles in the coming years.
Speaking on Saturday, Luca de Meo, CEO of Renault, said Europe's automotive industry could be issued an enormous €15billion (£12.6billion) penalty for failing to meet carbon emissions targets.
Manufacturers face tough CO2 targets set out by the European Union in 2025 when the cap on average emissions from new vehicle sales falls from 116g/km down to 94g/km.
If the average CO2 emissions of a manufacturer's fleet exceed its specific emissions target in a given year, they must pay an "excess emissions premium".
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Luca de Meo has issued a warning for other manufacturers
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This will lead to a fine of €95 (£80.20) per g/km of target exceedance for each of its new vehicles registered that year.
Luca de Meo, who is also the president of the European Automobile Manufacturers Association (ACEA), warned that this could have dire consequences for brands.
He added: "If electric vehicles remain at today's level, the European industry may have to pay €15billion (£12.6billion) in fines or give up the production of more than 2.5 million vehicles.
"The speed of the electric ramp-up is half of what we would need to achieve the objectives that would allow us not to pay fines," Reuters reported.
The CO2 limits were first introduced in 2020 and has since resulted in the average CO2 emissions from all new passenger cars registered dropping by 27 per cent between 2019 and 2022.
The EU's Energy, Climate Change and Environment Committee stated that this was down to a surge in zero emission vehicles, amounting to 13.4 per cent of new cars and six per cent of new vans in 2022.
The latest data from New AutoMotive's Electric Car Count, Renault has sold 4,597 electric vehicles over the last 12 months, making up 8.7 per cent of its total sales.
Renault currently has four electric vehicles on the UK market including the 379-mile range Scenic E-Tech, the £33,995 Megane E-Tech, the Kangoo E-Tech van and the Trafic E-Tech.
The 57-year-old continued, saying: "Everyone is talking about 2035, in 10 years, but we should be talking about 2025 because we are already struggling.
"We need to be given a little flexibility. Setting deadlines and fines without being able to make that more flexible is very, very dangerous."
There are a handful of exemptions and derogations for the EU CO2 targets, although Renault would not qualify for either given their widespread operations as one of the continent's most famous brands.
Speaking in July, de Meo warned that the future of electric cars was in jeopardy since sales are slumping in Europe, again calling for flexibility when manufacturers need to end the sale of new petrol and diesel vehicles.
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Renault aims to achieve net zero emissions in Europe by 2040
RENAULTHe said it would be a "serious strategic error" for brands to ditch any electric vehicle targets purely based on a slight fall in EV sales, with Renault aiming to reach net zero emissions in Euro by 2040.
The Italian executive added: "The truth is we are not yet on the right trajectory to achieve 100 per cent electric cars by 2035. That's the truth. If customers don't follow us, we're all responsible. We need to cut costs."