Luca de Meo, CEO of Renault Group, warned that European car manufacturers could face fines totalling €15 billion (approximately $16.6 billion) if they fail to comply with EU emission standards.
He called for “some flexibility” in these regulations as electric vehicle (EV) sales in Europe slow down.
Speaking to France Inter radio, de Meo highlighted the stringent average carbon dioxide emissions standards all sold vehicles must meet.
To avoid penalties, companies might need to cut their production by “more than 2.5 million cars.” He also noted that one electric vehicle could compensate for the emissions of four gasoline cars.
“We are preparing for 2025 now as we are taking orders for cars that we will deliver,” explained de Meo.
“According to our calculations, if the production of electric vehicles remains at the current level, the European industry might have to pay fines of €15 billion or forego production of over 2.5 million units.”
De Meo, who also serves as the president of the European Manufacturers Association, stressed the importance of flexibility: “Setting inflexible deadlines and penalties is very dangerous,” he warned, according to Agence France-Presse.
In August, electric vehicles accounted for only 12.5% of the European car market, with a 10.8% year-on-year drop in sales.
The Renault chief also emphasized the critical role of the EV market for European battery manufacturing projects, which could face difficulties if EVs do not sell well.
De Meo attributed the sluggish electric vehicle market to high prices, slow charging station installations, and “uncertainty” regarding purchase subsidies, like the ones recently cancelled in Germany last December, which led to a sharp decline in sales.
“We need stability, visibility, and some coherence in policy,” he stated.
This crisis reflects in the European automotive industry’s struggle amidst Chinese competition, with leading company Volkswagen announcing an unprecedented austerity plan that might even lead to factory closures in Germany—an outcome Renault is striving to avoid after achieving savings.
“A few years ago, we had to follow a very strict plan by reducing our production capacity by more than one million vehicles,” de Meo remarked.
