25 Mar 24

BMW, VW and Renault speak out against EU’s CO2 target

Well, this is awkward. Three major automakers call on the EU to adjust its CO2 targets – citing reduced market appetite for EVs. Does that leave corporate fleets as the last true believers in ambitious electrification?

The heads of three major European automakers have asked the EU to review its target for CO2 emissions reduction. The CEOs of Renault, Volkswagen and BMW, put forward two key arguments for a review: the CO2 phase-out is putting too much pressure on the automotive industry; and the market is not buying enough EVs – or at least not fast enough.

“Marshall Plan”

  • Citing the enormous cost of the transition, Renault CEO Luca de Meo in a recent open letter to the EU pleaded for “a European Marshall Plan (…) to accelerate (vehicle) parc renewal and thus drastically reduce CO2 emissions”, alluding to the massive wave of financial support that prevented economic collapse in Western Europe right after World War II. 
  • Last week, Oliver Blume, CEO of VW Group, said during the company's annual results presentation that “it doesn’t make sense that the industry has to pay penalties when the framework conditions for the EV ramp-up are not in place”.
  • And just a few days ago, Oliver Zipse, CEO of BMW, said his company “believe(s) a comprehensive review of CO2 fleet legislation in the EU is essential.”

A bit of context: from 2025 – in less than 10 months, in other words – the EU will require that fleet emissions from new cars sold in Europe go down by 25% compared to 2021.

Unrealistic target

OEMs who don’t comply with this further restriction on emissions will be fined, to the tune of €95 per vehicle registered in the EU, multiplied annually by each gram of CO2 they’re above the target. 

Europe’s traditional automakers, who still mainly manufacture vehicles with internal combustion engines, feel this target is unrealistic, considering the current market conditions. 

Across Europe, governments have been reducing their EV subsidies. As a result, demand has slumped and EV sales have stagnated in many markets, which makes it harder for OEMs to achieve the aforementioned target. 

Fully invested

In his recent call for a review of the EU’s emissions, Mr Zipse pointed out that electrification is “the free decision of millions of customers. It’s not just like the energy infrastructure, where you can switch something off and then something else happens automatically.”

But of course, the market consists of more than just private consumers, whose preference may change on a whim. Corporate fleets have fully invested themselves in the paradigm shift from mobility based on fossil fuels to sustainable alternatives, often with multi-year decarbonization and electrification strategies. 

The elections for the European Parliament next June may well return an assembly that is more skeptical about climate change, and more receptive for calls like these, to water down the electrification of transport. If that’s the case, one may wonder what impact that will have on the ambitions of corporate fleets.  

Image: Shutterstock 1928699927

Authored by: Frank Jacobs