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SUV boom thwarts carmakers

Some German carmakers will struggle to achieve the legally mandated European CO₂ targets in 2021, facing big fines. Under the targets, carmakers must reduce the average emissions of the cars they sell to below 95g of CO₂ per km.

The success with heavier and more powerful cars will create difficulties for German carmakers in the near future. Volkswagen, BMW and Daimler are facing fines as rising consumer appetite for large sport utility vehicles make the targets tougher to meet, according to forecasts by PA Consulting.

Only four out of 11 carmakers are on course to meet the targets for CO₂ emissions in Europe, the report states. Carmakers that miss their targets face penalties, with a fine of €95 for every gram of CO₂ above the limit, multiplied by the number of cars they sell in 2020. This would leave VW facing a €1.7bn fine, Opel/PSA €700m, BMW facing a €600m penalty and Daimler €200m, the PA Consulting report predicts.

Thomas Goettle, head of automotive, PA Consulting Group said: “Carmakers need to make radical changes in order to meet the EU CO₂ emissions targets for 2021. Penalties would mean a huge harm to their reputation. Hence the carmakers will try everything to avoid such fines," Goettle continued.


Driving into a low emissions future – looking beyond 2021

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Although most of the carmakers have announced big investments for electric mobility, the real impact will take a few more years. "The development cycles are too late," Goettle said. "The combination of SUVs and unexpected rapid decline of diesel cars adds complexity and difficulty and will increase the challenge that companies face."

For the next decade PA predicts that electric vehicles and combustion engines will approach cost and price parity - which makes it easier to achieve emission targets after 2021. "As early as 2020 diesel and electric vehicles will have similar costs," Goettle clarified - and this also applies to petrol cars 2027 latest.

Click here to download a copy of the CO₂ ranking report


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