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Europe's carmakers discount EVs, hike petrol car prices as new emissions rules loom

Source: TodayFeedsMedia

By Gilles Guillaume and Alessandro Parodi

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  • Summary
  • Companies
  • EU to tighten emissions rules on Jan. 1
  • Around 22% of cars sold must be electric to meet targets
  • Based on 2024 sales, sector would pay 15 bln euros in fines
  • Companies set to discount EVs to avoid penalties

PARIS/GDANSK, Dec 17 (Reuters) - European automakers are raising prices of petrol cars and readying discounts on electric vehicles as they brace for yet another challenge - tougher emissions rules that threaten to further shrink profits across the struggling industry.

The European Union will drastically lower its cap on automotive carbon dioxide emissions from Jan. 1, meaning at least one-fifth of all sales by most car companies must be EVs to avoid heavy fines.

But so far this year only 13% of all vehicles sold in the region have been electric, data from the European Automobile Manufacturers' Association (ACEA) lobby group shows.

"The gap is really big," said Marc Mortureux, director of French car lobby PFA.

The tighter rules come as the sector is already dealing with excess capacity due to lacklustre sales and growing Chinese competition, prompting profit warnings from Volkswagen (VOWG_p.DE)

, opens new tab, Stellantis (STLAM.MI)

, opens new tab and others in recent months.

Now the companies will need to sell more EVs, which cost more to make than traditional vehicles, at a time when political and economic uncertainties and declining EV subsidies are deterring consumption, said Mortureux.

In a sign of the growing concern over the rules, Stellantis CEO Carlos Tavares abruptly resigned this month, partly due to disagreement with the board over how to deal with the issue.

STEERING DEMAND

With just weeks to go, Europe's politicians are urging Brussels to rethink the targets. But carmakers are getting to work, aiming above all to avoid fines that could reach 15 billion euros ($15.76 billion) based on current sales, ACEA chairman Luca de Meo has said.

VW, Stellantis and Renault (RENA.PA)

, opens new tab have raised the prices of petrol engine models by several hundred euros in the last two months, in what analysts say is an attempt to curb demand for heavier emitters and make pricier electric models appealing.

The hardest hit companies have cut EV prices and plan to "pool" emissions to avoid sanctions.
The hardest hit companies have cut EV prices and plan to "pool" emissions to avoid sanctions.

"Carmakers have started with their pricing strategy to steer demand towards battery EVs in order to reach the CO2 targets and avoid potential fines," said Beatrix Keim of the Center for Automotive Research.

Last month, Stellantis's Peugeot hiked prices in France of all of its models apart from fully electric ones by as much as 500 euros.

Renault Group increased prices on some pure petrol models, for instance adding 300 euros or 1.6% to the Clio SCE 65, but kept prices of hybrid versions unchanged.

Peugeot described the new pricing as an "economic rise", while Renault said a rise was "normal" over a car's lifetime.


https://Reuters. Com/europe's-carmakers-discount-evs-hike-petrol-car-prices-as-new-emissions-rules-loom/


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