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.



Gold Price Firms on Israel-Iran Conflict, Platinum Scales over 10-year High

Jewellery is displayed at the Gold Souk market in Dubai, United Arab Emirates, March 14, 2025. REUTERS/Amr Alfiky/File Photo
Jewellery is displayed at the Gold Souk market in Dubai, United Arab Emirates, March 14, 2025. REUTERS/Amr Alfiky/File Photo
TT
20

Gold Price Firms on Israel-Iran Conflict, Platinum Scales over 10-year High

Jewellery is displayed at the Gold Souk market in Dubai, United Arab Emirates, March 14, 2025. REUTERS/Amr Alfiky/File Photo
Jewellery is displayed at the Gold Souk market in Dubai, United Arab Emirates, March 14, 2025. REUTERS/Amr Alfiky/File Photo

Gold prices gained on Thursday as fears of an escalating conflict between Israel and Iran drove investors towards the safe-haven metal, while platinum scaled its highest level since September 2014.

Spot gold was up 0.2% at $3,374.49 an ounce at 1100 GMT US gold futures fell 0.5% to $3,391.00.

"We're seeing some haven flows in gold, which is really not surprising given what's happening ... with the fighting between Iran and Israel," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

Equity markets have dipped, which is also supporting the precious metal, Razaqzada added, Reuters reported.

Israel said on Friday it had struck Iran's only functioning nuclear power plant on the Gulf coast, potentially a major escalation in its air war against Iran.

Meanwhile, the Fed held interest rates steady on Wednesday and policymakers still forecast cutting rates by half-a-percentage point this year, but have slowed their overall outlook for rate cuts in response to a more challenging economic outlook.

However, Fed Chair Jerome Powell cautioned against putting too much weight on this outlook, warning of "meaningful" inflation ahead as higher import tariffs loom.

Gold is considered a safe-haven asset during times of geopolitical and economic uncertainty. It also tends to thrive in a low-interest rate environment.

In other metals, platinum lost 2.5% to $1,289.71, having risen to its highest level since September 2014 earlier in the session.

Platinum prices are supported by rising Chinese imports, ongoing supply concerns, high lease rates and increased investor interest as high gold prices push consumers toward cheaper alternatives, analysts say.

"The supply-demand dynamics at play in the platinum market do hint at there being further upside in store for the price," KCM Trade Chief Market Analyst Tim Waterer said.

Palladium lost 1.1% to $1,036.74, while silver fell 1.2% to $36.31 per ounce.