Saturday, February 8, 2025

Volkswagen warns of losses of 11 billion kroner

Volkswagen stands to lose a whopping 11 billion kroner. Money that the already crisis-stricken car manufacturer will need to pay fines to the EU.

Volkswagen stands to lose 11 billion Danish kroner as a result of the EU's new emissions requirements. The group warns that the new rules will entail significant costs.

The EU's new emission requirements came into effect at the turn of the year. The requirements lower the permitted carbon dioxide emissions per car to 93.6 grams per kilometer.

For Volkswagen, and other car manufacturers, this could have major economic consequences, writes Bloomberg .

Volkswagen anticipates stalls and other costs of approximately 11 billion Danish kroner distributed across the group's various car brands in Europe.

"The expected costs include potential penalties for exceeding the EU's tougher emissions targets," said Rolf Woller, head of investor relations at Volkswagen AG, during a telephone call with a number of analysts.

In addition to stalls, Volkswagen may be forced to increase sales of electric cars, which often have a lower profit margin than gasoline and diesel cars.

Several experts predict that the price of electric cars will fall over the course of the year, as manufacturers are pressured to increase the share of electric cars in their total sales.

The industry organization ACEA, of which Mercedes' Swedish-German director Ola Källenius has just become chairman, has called on the EU to change the rules.

The EU has responded by proposing new purchase subsidies for electric cars, to be applied in all EU countries. According to the Vice-President of the European Commission, this should do away with anything other than electric cars.

While Volkswagen and other car brands face major challenges, there are also companies that can benefit from the new rules.

Tesla is expected to be able to sell emissions rights for billions of kroner. Even the smaller Polestar brand is expected by analysts to earn billions of kroner on the new quota system. Read more about it here .

Volvo Cars will also sell emission allowances. However, the Chinese brand has not disclosed how much it stands to earn.

The situation is complex and highlights the upheavals facing the automotive industry in the transition to more sustainable transport.

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