A forecast assessing car manufacturers' performance against mandatory EU CO2 emissions targets suggests that Ford, BMW, Volkswagen, Fiat Chrysler, Peugeot Citroen including Opel/Vauxhall, and Hyundai-Kia will miss their 2021 targets, leaving them facing fines in the billions. This projection is according to an annual analysis report by PA Consulting Group.
PA's 2017 ranking analysis shows that only four out of 11 carmakers are forecast to meet the EU 2021 CO2 emission target, with the rest facing significant fines. The majority of carmakers will face penalties of €95 for every gram of CO2 above the limit, multiplied by the number of cars they sell in 2020. These fines could reach or rise above the €1bn mark for carmakers.
At the current rate, VW is expected to face the biggest fine of €1.7bn, followed by Fiat Chrysler with €1.2bn. The biggest fall is Peugeot Citroen, which was set to meet EU emissions targets, but turned red this year following the merger with Opel and Vauxhall. This affects their forecast until 2021. In addition, German carmakers, particularly VW and BMW, face higher penalties and are still suffering from bigger gaps in CO2 performance for 2021, primarily due to the decline of diesel in their portfolio without direct alternatives in place today.
The end of the scale has seen positive developments, with Volvo, Toyota, Renault-Nissan, and Jaguar Land Rover expected to meet the EU emissions targets. A huge change has occurred at the top of the table, with Volvo a new number one, up from seventh last year. This is based on its strategy to not sell any more cars with combustion engines from 2019 onward, which has resulted in a huge improvement in CO2 performance ahead of 2021.
Jaguar Land Rover turns from amber to green for the first time now for 2021, achieving its specific target based on good progress for CO2 performance in the fleet portfolio. Toyota remains number two, but also with significantly improved CO2 performance for 2021.
Emissions performance varies across countries, but Norway leads the way. Norway has the lowest level of emissions and the highest use of plug-in hybrids and electric vehicles, which made up 29% of new car sales in 2016, reflecting its policy of banning the internal combustion engine by 2025.
In comparison, meeting the UK's ambitions to ban combustion engines by 2040 will be a challenge due to the automotive sector's reliance on conventional engines, with the UK appearing toward the bottom end of the scale of European countries. Developments of alternatives lag behind other countries, and it is not currently well placed to drive this shift to electric options, given it produces 2.5 million combustion engines a year, 15% of European total.
For further information or to receive a full copy of the report, contact Annabel.Banks@PAconsulting.com, +44 207 881 3684.