EU Relaxes Emission Targets: Relief or RISK for Automakers?

The European Commission has extended the deadline for automakers to meet new CO2 emission targets from one year to three. This decision offers temporary relief to European car manufacturers who must increase electric vehicle sales to meet these standards and avoid fines. The plan still awaits EU approval.

The European Commission has bowed to the demands of European automakers by extending the deadline to meet new CO2 emission targets from one year to three. As a result, carmakers now have until 2027 to meet the expectations set for 2025 and avoid substantial fines, pending further approvals.

Commission President Ursula von der Leyen announced the extension after negotiations with major auto executives, union leaders, and campaign groups. Despite the considerable extension, the core targets remain intact. The move offers much-needed relief to the sector, which is facing dwindling demand and potential U.S. tariffs.

Responses from member countries like Italy and the Czech Republic have been mostly supportive, and automaker shares surged following the announcement. However, critics argue that this might impede European competitiveness in the electric vehicle market, lagging behind China and the U.S.

(With inputs from agencies.)