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The regulation aims to promote the sale of electric vehicles. F. P.
What is the CAFE regulation for electric cars coming into effect in 2025?

What is the CAFE regulation for electric cars coming into effect in 2025?

A. Noguerol

Miércoles, 1 de enero 2025, 11:00

With the arrival of the new year, the European Union is implementing the 'CAFE' regulation (Corporate Average Fuel Emissions), which stipulates that carbon dioxide emissions must decrease to 93.6 grams per kilometre for cars sold in the 27 EU countries.

According to this regulation, manufacturers that fail to meet these emission limits could face fines of up to 95 euros for each gram exceeded, potentially leading to multimillion-euro penalties for car brands that do not achieve the 'zero emissions' vehicle sales targets outlined in the community regulation.

From now on, the 'CAFE' regulation requires that the average CO2 emissions of each manufacturer's vehicles be reduced by 15% compared to the levels at the start of the decade. The limit coming into effect in 2025 will be further reduced to 49.5 grams of CO2 per kilometre, with the aim of implementing a de facto ban on the sale of petrol and diesel combustion vehicles by 2035.

Some European countries have unsuccessfully attempted to pressure Brussels to delay the regulation's implementation. France tried to form a coalition of capitals against the European Commission led by Germany's Ursula Von der Leyen to avoid imposing penalties on manufacturers. In early September, Italy requested a thorough review of the regulation from Brussels, fearing that the measure could cause the collapse of the community's automotive industry. Romania, home to Dacia (Renault Group), which lacks battery electric cars in its catalogue except for the Spring imported from China, considers the European electrification roadmap too aggressive.

The president of ACEA and also CEO of Renault Group, Luca de Meo, argues that "without a clear political statement from the European Commission by the end of 2024, as also requested by the German, French, Italian, and other European governments, the automotive industry risks losing up to 16 billion euros in investment capacity, whether by paying fines, reducing production, partnering with foreign competitors, or selling electric vehicles at a loss."

In this regard, Luca De Meo emphasises that waiting for the start of the Commission's strategic dialogue on the future of the automotive industry or the review of CO2 emission regulations in 2026 "is not an option, no matter how welcome and necessary both may be."

Manufacturers request more time

The European Automobile Manufacturers Association (ACEA) calls for "clarity on employment and investments" to avoid damaging Europe's competitiveness, although they acknowledge that the automotive industry remains committed to the EU's climate neutrality goal by 2050 and the transition to zero-emission mobility.

The European automotive industry association warns that, unlike four years ago, to meet the stricter CO2 reduction targets, "this time, a smooth interaction of factors both within and outside the direct control of manufacturers is necessary."

Currently, electric vehicle sales in Europe are stagnating at around 13% of the market share, which is 10 percentage points below where they should be. "A gap too large to close in time," they warn.

Projections vary regarding the total amount of fines manufacturers would ultimately have to pay if they fail to meet these sales quotas. The industry estimates it could be between 10 and 16 billion euros.

However, market sources suggest that in their central scenario, the potential impact could be limited to 5.1 billion euros.

Nonetheless, according to industry executives consulted by Europa Press, it is warned that the automotive industry risks losing up to 16 billion euros in investment capacity, whether by paying fines, reducing production, partnering with foreign competitors, or selling electric vehicles at a loss as a result of the 'CAFE' regulation. To date, ACEA members have committed 250 billion euros to the transition to electric mobility.

With the current levels of electric vehicle sales, manufacturers would have to cease the production of 2.5 million combustion cars or face the fines now expected from the European Commission.

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