According to PA Consulting Group’s annual forecast of car manufacturers’ performance against mandatory EU CO2 emissions targets, currently only 4 out of 11 car makers are expected to meet them by 2021.
Volvo, Toyota, Renault-Nissan and Jaguar Land Rover are the companies expected to meet the targets. Carmakers who miss their target may face penalties of €95 for every gram of CO2 above the limit, multiplied by the number of cars they sell in 2020. These fines could rise above the €1bn mark for some manufacturers.
Car manufacturers are facing the reinvention of their industry and will need to work quickly to meet the EU’s fast approaching 2021 target. Adding to the pressure, there have also been a number of Government announcements of plans to ban internal combustion engines, as early as 2025 in Norway and the Netherlands, and by 2040 in the UK and France. Germany and China are set to follow suit.
Emissions performance varies across countries but Norway leads the way with the lowest level of emissions and the highest use of plug-in hybrid and electric vehicles. By comparison, the UK appears at the bottom end of the scale and meeting the 2040 target will be a challenge. This is mainly due to our automotive sector’s reliance on conventional engines and development of alternatives lagging behind other countries.
There have been changes at the top of the emissions table with Volvo ranking number one, up from seventh last year. This is based on their strategy to not sell any more cars with combustion engines from 2019 onwards, which has resulted in a huge improvement in projected CO2 performance. Jaguar Land Rover turns from amber to green for the first time, achieving their specific target based on good progress for CO2 performance in the fleet portfolio.
Car manufacturers face considerable challenges in meeting the 2021 CO2 emissions targets but it is encouraging to see that almost all are now making significant investments in hybrids and electric vehicles to improve their performance.