Europe’s Auto Industry Might Face €15 Billion in Fines Over Emissions

A worker walks past parked Renault cars at its stockyard on the outskirts of the western Indian city of Ahmedabad June 11, 2013. (Reuters)
A worker walks past parked Renault cars at its stockyard on the outskirts of the western Indian city of Ahmedabad June 11, 2013. (Reuters)
TT
20

Europe’s Auto Industry Might Face €15 Billion in Fines Over Emissions

A worker walks past parked Renault cars at its stockyard on the outskirts of the western Indian city of Ahmedabad June 11, 2013. (Reuters)
A worker walks past parked Renault cars at its stockyard on the outskirts of the western Indian city of Ahmedabad June 11, 2013. (Reuters)

Renault chief Luca de Meo warned Saturday that European carmakers could face fines of 15 billion euros if they fail to respect EU emissions rules, calling for "some flexibility" as electric car sales slow on the continent.

He told France Inter radio: "In order to meet CO2 emission standards calculated on average for all cars sold, manufacturers will have to reduce their production by more than 2.5 million vehicles to avoid being penalized."

De Meo, who is also president of the European Automobile Manufacturers Association (ACEA), said an EV car can compensate for four thermal cars.

"We are now preparing for 2025 because we are taking orders for the cars we're going to deliver. According to our calculations, if EV production remains at today's level, the European industry may have to pay 15 billion euros in fines or give up production of more than 2.5 million units," he said.

"We need to be given a little flexibility. Setting deadlines and fines without being able to make that more flexible is very, very dangerous," he warned.

In August, battery-electric cars accounted for 12.5% of the EU car market, with a 10.8% drop in sales year-on-year.

The Renault chief underlined the importance of the EV market for European industrial battery manufacturing projects. "If electric cars do not sell, these projects will face difficulties," he added.

To explain the weak market for electric vehicles, de Meo cited the high prices of cars, the very slow installation of charging stations and "uncertainty" about the subsidies for the purchase of electric vehicles.

He said the German government ended its electric car subsidy program last December, leading to a drastic drop in sales.

Commenting on those subsidies, he stressed "we need stability, visibility" and "a certain consistency" in our policies.

The European automobile industry is under intense pressure from Chinese competition. Volkswagen warned this week that it would consider closing factories in Germany for the first time in its 87-year history.

This should not happen to Renault, which has already made savings, de Meo assured. "A few years ago, we had to make a very hard decision by reducing production capacity by more than one million vehicles," he explained.



UN Trade Agency: New Trade War Deadline Prolongs Instability

Workers inspect imported stones at a marble factory in Kishangarh, in India's Rajasthan state on July 8, 2025. (Photo by HIMANSHU SHARMA / AFP)
Workers inspect imported stones at a marble factory in Kishangarh, in India's Rajasthan state on July 8, 2025. (Photo by HIMANSHU SHARMA / AFP)
TT
20

UN Trade Agency: New Trade War Deadline Prolongs Instability

Workers inspect imported stones at a marble factory in Kishangarh, in India's Rajasthan state on July 8, 2025. (Photo by HIMANSHU SHARMA / AFP)
Workers inspect imported stones at a marble factory in Kishangarh, in India's Rajasthan state on July 8, 2025. (Photo by HIMANSHU SHARMA / AFP)

The Trump administration's decision to extend a negotiating deadline for tariff rates is prolonging uncertainty and instability for countries, the executive director of the United Nations trade agency said on Tuesday.

US President Donald Trump on Monday ramped up his trade war, telling 14 nations, from powerhouse suppliers such as Japan and South Korea to minor trade players, that they now face sharply higher tariffs from a new deadline of August 1.

"This move actually extends the period of uncertainty, undermining long-term investment and business contracts, and creating further uncertainty and instability," Pamela Coke-Hamilton, executive director of the International Trade Centre, told reporters in Geneva, according to Reuters.

"If a business is not clear on what costs they are going to pay, they cannot plan, they cannot decide on who will invest," Coke-Hamilton said, citing the example of Lesotho, where major textile exporting companies have withheld their investment for the time being, pending a tariff outcome.

The uncertainty, combined with deep cuts in development aid, had created a "dual shock" for developing countries, she added.

Countries have been under pressure to conclude deals with the US after Trump unleashed a global trade war in April that roiled financial markets and sent policymakers scrambling to protect their economies.