Posted By Global Banking and Finance Review
Posted on December 19, 2024
(Reuters) - German Chancellor Olaf Scholz on Thursday urged EU policy makers to avoid inflicting more damage on the European Union's struggling auto industry in remarks at the start of a summit in Brussels.
"The Commission should therefore find a way to ensure that the fines, if they become necessary, do not affect the financial liquidity of companies that now need to invest in electromobility," Scholz said, referring to the EU's new carbon dioxide emission (CO2) reduction targets due in 2025.
The EU will lower its cap on automotive carbon dioxide emissions from Jan. 1, meaning at least one fifth of all sales by most car companies must be electric vehicles (EVs) to avoid heavy fines.
If they fail to meet the targets in 2025, European carmakers could face an estimated 15 billion euros ($15.62 billion) in fines, with Germany's Volkswagen, the region's top automaker, taking the biggest hit, according to the EU's car lobby ACEA.
New car sales growth in Europe turned negative again in November, with sales of fully electric cars (BEVs) dropping by 9.5% and Germany and France leading the declines.
Germany, whose economy has been heavily reliant on its auto industry, has repeatedly called on the EU for flexibility and its auto industry lobby has cited the need to narrow the gap between ambitious CO2 goals and the necessary political support and incentives.
($1 = 0.9605 euros)
(Reporting by Andrey Sychev; editing by Matthias Williams and Barbara Lewis)