8/9/2024–|Last update: 8/9/202411:57 AM (Makkah Time)
Renault CEO Luca de Meo has warned that Europe’s auto industry faces fines of up to 15 billion euros ($17.4 billion) for carbon emissions as demand for electric vehicles slows.
Carmakers face tougher EU CO2 emissions targets in 2025, with the maximum average emissions from new vehicles sold falling to 94g/km from 116g/km in 2024.
“If electric car sales remain at their current level, the European car sector could find itself forced to pay fines of up to 15 billion euros or give up production of more than 2.5 million cars,” De Meo told France Inter radio.
“The speed of increasing adoption of electric (cars) is half of what we need to achieve the targets that will allow us not to pay fines,” added De Meo, who is also president of the European Automobile Manufacturers Association.
It could also lead to penalties of hundreds of millions of euros for major car manufacturers.
Customs fees
Last July, the European Union imposed customs duties of up to 38% on imported Chinese electric cars, before a final decision in November, according to the European Commission, accusing Beijing of illegally supporting manufacturers of these vehicles.
The new fees will be added to a 10% fee already applied to Chinese cars.
The Commission justified its decision by saying that after a wide-ranging investigation into Chinese state support for the electric car industry, which began in October 2023, Brussels announced these new duties. While it launched discussions with Beijing to try to resolve the issues identified and defuse the risks of a trade war.
The European auto industry fears that its industries will deteriorate if it fails to stop the announced increase in cars manufactured in China, which has a clear lead in the field of electric cars.
Cars from China account for about 22% of the European market, up from 3% three years ago, according to industry estimates. Chinese brands account for 8% of electric cars sold in the EU.
Harm to European production
Based on its investigations, Brussels concluded that China’s electric vehicle sector “benefits from unfair subsidies that pose a risk of economic harm to European producers.”
As Chinese electric car production and sales increase in international markets, countries such as Canada and the United States have imposed tariffs to protect their auto industries.
The Chinese government provided at least $231 billion in subsidies to the electric vehicle sector between 2009 and the end of last year, according to Bloomberg.
