Europe’s automotive industry is at risk of facing up to €15 billion ($17.4 billion) in fines due to sluggish demand for electric vehicles (EVs), according to Renault CEO Luca de Meo. Speaking on Saturday, de Meo warned that the sector could be penalized if it fails to meet the stringent European Union carbon emissions targets set for 2025. Automakers must reduce the average emissions of new vehicle sales to 94 grams of CO2 per kilometer by 2025, down from 116 g/km in 2024.
De Meo, who also serves as the president of the European Automobile Manufacturers Association (ACEA), noted that the industry’s transition to electric vehicles is progressing at only half the pace required to meet these targets. “If electric vehicles remain at today’s level, the European industry may have to pay €15 billion in fines or give up the production of more than 2.5 million vehicles,” he said in an interview with France Inter radio.
The penalties for exceeding CO2 limits in Europe are severe. Automakers are fined €95 for every excess gram of CO2 per kilometer, multiplied by the total number of vehicles sold. This could lead to substantial financial consequences for larger car manufacturers, amounting to hundreds of millions of euros in fines if they do not meet the emissions thresholds.
De Meo emphasized that while the industry is focused on the EU’s 2035 ban on internal combustion engines, the more immediate concern lies in the 2025 targets. “Everyone is talking about 2035, in 10 years, but we should be talking about 2025 because we are already struggling,” he warned.
The Renault CEO urged regulators to consider providing the auto industry with greater flexibility in achieving emissions targets. He cautioned that strict deadlines and fines without any room for adjustments could have damaging effects on the sector. “Setting deadlines and fines without being able to make that more flexible is very, very dangerous,” de Meo said, stressing the need for more realistic timelines to allow automakers to ramp up electric vehicle production and avoid costly penalties.
The slow growth in EV demand is concerning for European automakers, who must balance the transition to greener technologies with the financial and logistical challenges of maintaining production. As the 2025 deadline approaches, the industry is under mounting pressure to accelerate its electric vehicle offerings and avoid severe financial repercussions.
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