EU Extends CO2 Emission Deadline, Giving Automakers Breathing Space

The European Commission has extended the deadline for automakers to meet CO2 emission targets from one to three years starting in 2025. The decision, influenced by industry's current challenges, aims to facilitate compliance through increased electric vehicle sales, amid competition from Chinese and U.S. rivals.

The European Commission announced on Monday its decision to extend the deadline for European automakers to achieve CO2 emission targets by three years, allowing compliance from 2025 to 2027. This extension comes amidst pressure from car manufacturers facing factory closures and potential U.S. tariffs.

Commission President Ursula von der Leyen confirmed the plan at a news conference, emphasizing that while the emission targets remain unchanged, the extended timeline provides the industry with more flexibility. The proposal, pending approval from EU governments and the European Parliament, aims to boost electric vehicle sales to close the gap with Chinese and U.S. carmakers.

Shares in major European automotive companies such as Volkswagen, BMW, and Mercedes-Benz increased following the announcement. The EU will release an automotive action plan on Wednesday detailing strategies to compete with rivals like Tesla and advance its fleet electrification efforts.

(With inputs from agencies.)