13 European car manufacturers are facing huge EU fines next year for failure to hit emission reduction targets. That is the conclusion of analysis by PA Consulting which predicts the manufacturers could have to make a massive €14.5 billion payout.

The figures indicate that average CO2 emissions are actually on the rise due to more SUV sales and a switch from diesel to petrol power. It is the fifth year PA Consulting has assessed progress towards the targets and after positive results in recent years, many manufacturers have taken a step backwards and all now look likely to miss their reduction goals.

Michael Schweikl, automotive expert at PA Consulting, commented, “Car makers are running out of time to improve performance quickly enough to avoid fines. Marketing, sales and pricing strategies that increase the take-up of low-emissions vehicles will be essential in getting manufacturers closer to the targets.”

All the car makers that were previously on track to meet their targets including, Toyota, Renault-Nissan-Mitsubishi , Volvo, Honda and Jaguar Land Rover are now set to fall short according to the  forecasts. Companies are likely to face significant fines with Volkswagen facing a possible penalty of €4.5 billion, while Jaguar Land Rover could face a fine that amounts to 400% of its 2018 profit.

The PA Consulting analysis suggests it is too late for changes in technology to make a difference to the 2021 targets, so manufacturers will have to take a different strategy to make an immediate impact. This will involve manufacturers looking closely at how they can encourage sales of low-emission vehicles throughout 2020, as electric vehicles and plug-in hybrids qualify for super-credits that could significantly lower fines.

It also suggests that vehicle manufacturers must accelerate the introduction of innovative technologies immediately and abandon the normal trickle down process. They also need to adopt more cost saving development partnerships.

Michael Schweikl concluded, “Car makers will need to adapt to an enormous change in what they do as they move from the technology of combustion engines to low-emission electric vehicles. While much exciting technological development is already underway, manufacturers cannot underestimate the complexity, cost and cultural change required.”