New emission targets from the EU will be so difficult to meet that Volkswagen, the world’s largest maker of cars, said its €30 billion effort to roll out electric vehicles in the next five years would not be sufficient.
The German parent of Volkswagen, Audi, Porsche and other brands said it would have to accelerate its shift into electric vehicles and may even need to end certain combustion models to meet the targets agreed in Brussels on Monday night.
The new regulations require that new cars sold in 2030 emit 37.5 per cent less CO2 on average, compared to 2021 levels.
Volkswagen currently plans on selling up to 3 million electric vehicles a year by 2025, or up to 25 per cent of its global sales. Under the new rules electric vehicles would need to be 40 per cent of all European sales by 2030 – more ambitious than currently planned, said Herbert Diess, Volkswagen's chief executive.
“A review of our planning is necessary, which will be done in autumn 2019,” Mr Diess said in a press release. He acknowledged that VW’s planned actions were “not sufficient” to meet the new goals.
A VW spokesman explained that VW’s smallest cars, such as the Up! hatchback, might have to be discontinued because there was not a cost-efficient way to reduce their carbon emissions to less than 95 grammes per kilometre.
Mr Diess did not criticise the new rules, but the European Automobile Manufacturers’ Association (ACEA) decried that the targets were based on political aspirations rather than reality. It warned of a “seismic impact on jobs” across the automotive value chain that employs 13.3 million Europeans.
Political motives
“Delivering a 37.5 per cent CO2 reduction might sound plausible, but is totally unrealistic based on where we stand today,” the ACEA said. “Industry deplores that this 2030 target is driven purely by political motives, without taking technological and socio-economic realities into account.”
Volkswagen said last month it would invest €44 billion over the next five years on technologies for electric, autonomous, and shared vehicles, with €30 billion earmarked for electric.
The VW passenger car brand already sells electric versions of its Golf and Up models, but in 2019 it will begin to sell a new line of “ID” cars that have been designed to be electric from the ground up.
While the new regulations imply Volkswagen will need to increase its spending on new technologies, its shares were up 1.9 per cent. BMW and Daimler shares were also higher. – Copyright The Financial Times Limited 2018