Europe: Volkswagen Group Missed 2020 CO2 Fleet Target

Just around 0.5 g/km was missing, but it’s enough to see a fine of more than €100 million.

Volkswagen Group managed to decrease the average CO2 emissions of pits passenger car fleet in Europe (European Union, UK, Norway and Iceland) by 20% year-over-year, from 124 g/km in 2019 to 99.8 g/km in 2020. The numbers exclude Bentley and Lamborghini, counted individually.

It’s a great achievement, however, the preliminary data indicates that the target is around 0.5 g/km off target, which means fines. More than €100 million ($121 million), according to Bloomberg, or roughly €140 million, according to Schmidt Automotive Research (see the tweet below).

The reduction of the average CO2 emissions was possible mostly because of the increase in electric car sales by 335% year-over-year to 315,400 in Europe (globally it was 422,100). Plug-in share out of the overall volume for the Group in Europe increased from 1.7% to 9.7% (over 4.5% globally).

“The main drivers of this development were the Volkswagen Passenger Cars and Audi brands, which overfulfilled their CO2 fleet targets largely due to the successful start-up of their ID.31 and e-tron electric models. Based on preliminary figures, the Volkswagen Group thus reduced the average CO2 emissions of its new passenger car fleet in the EU by around 20 percent compared with 2019 to 99.8 g/km in 2020.”

Volkswagen Passenger Cars, which is the main part of the Volkswagen Group, achieved average CO2 emissions of 92 g/km (down 22% from 119 g/km) – within the legal CO2 target for the brand (97 g/km).

The expected fine of over €100 million is not the only cost. Additionally, the group has a CO2 pooling arrangement with SAIC’s MG (in total, several groups were also created) and as we understand – Volkswagen Group now has to pay for improvements of its average result.

The third main cost element might be lower margins for plug-ins, because of the necessity to sell them in volume by the end of the year.

A big part of the cost – for the entire industry – was however taken by the taxpayers in certain markets, where EV incentives skyrocketed (Germany is one of the examples).

Source: Read Full Article