EU gives car industry a reprieve on fleet targets

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The European car industry has been given more time to meet the stricter fleet limits for CO₂ emissions in 2025. To this end, the EU Commission proposed a change to the CO₂ standards back in March under Ursula von der Leyen. Instead of having to prove compliance with the limits every year, companies are now to be given three years to comply with them. As expected, the EU Parliament in Strasbourg adopted this proposal today, Thursday; the EU member states still have to formally approve the decision. However, they had already spoken out in favor of the three-year deadline in advance.

The decision means a postponement

This decision means a postponement: if European car manufacturers exceed the limit values for 2025, for example, they will not have to pay any fines initially. However, they will then have to exceed them in the two following years in order to reach the limit value in the end. This should help manufacturers in their current difficult situation.

According to the VDA, the German Association of the Automotive Industry, this is the right decision. The association has been calling for more flexible framework conditions and fundamentally more flexible targets for some time. However, it would also like to negotiate relief through the expansion of the charging infrastructure, lower electricity prices, the supply of chips and domestic battery production in order to consolidate its international competitiveness, particularly with regard to electric cars. It had already emphasized this at the beginning of March.

Problem areas China, USA and Germany

She has Chinese car production breathing down her neck, whose state-supported e-cars are now much more competitive internationally. In addition, car manufacturers are now also under pressure from the trade conflict with the USA. Since the beginning of April, the USA has imposed tariffs of 25 percent on imports of cars and car parts. However, North America is one of the largest sales markets for German car manufacturers, importing 13.1 percent more cars than any other country. Almost one in three Porsches and one in six BMWs were sold there in 2024, while the shares of VW, Audi and Mercedes-Benz were 12 to 15 percent. But Germany is also causing headaches for the automotive industry. Around one percent fewer new cars were registered here than in the previous year and around a quarter fewer than in 2019.

Manufacturer-specific fleet limits

The background to the impending penalties for the car industry are the so-called fleet limits. These legal requirements were tightened at the beginning of the year. An individual CO₂ value is assigned, which all cars sold by a manufacturer in the EU in the reference year must meet on average. For every gram of CO₂ more, a fine is due for each car sold in the EU – regardless of whether the individual car has complied with the limit value or not. The limit value for this year is 93.6 and is set to fall to 49.5  grams of CO₂ per km in 2030.

(fpi)