Emissions Risk

Electric cars are looking even better to German carmakers

electric cars
Everybody's doing it! Source: Reuters

One number says it all: If VW sold the same proportions of gasoline, diesel and electric cars in 2023 as it currently does, it would have to pay a fine of €4 billion ($4.75 billion). Calculations by the CAR Institute at Duisburg University show that Volkswagen would flagrantly miss an EU target to reduce CO2 emissions in this scenario, triggering the penalty. Domestic rivals BMW and Daimler face the same fate, though their fines would be lower, because they sell fewer cars than VW.

Starting in 2021, new automobile models released in the EU must emit less than 95 grams of carbon dioxide per kilometer driven. The goal is part of the European Union’s plan to cut greenhouse gases. The new cars must reach this target on average per carmaker, or the company has to pay €95 per gram over the goal, multiplied by the amount of cars sold in a year. The fines are due every year as long as a carmaker misses the target for new cars. VW, Europe’s largest carmaker, would suffer the most: It sold 3.5 million cars in the 28-nation EU last year.

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