PARIS (Reuters) – Europe’s auto industry faces a 15 billion euro ($17.4 billion) fine over its carbon emissions given the current slow pace of electric car sales, Renault Chief Executive Luca de Meo said on Saturday.

“If electric vehicles remain at today’s level, the European industry may have to pay 15 billion euros in fines or give up the production of more than 2.5 million vehicles and utility vehicles,” he said on France Inter.

“The speed of the electric ramp-up is half of what we would need to achieve the objectives that would allow us not to pay fines to the European community, so we are at half the speed, a bit all of us, I am not talking about Renault,” added Luca de Meo, also current president of the European Automobile Manufacturers Association (ACEA).

The European Union plans to ban the sale of combustion engines in 2035. From next year, the authorized ceiling for emissions of the main greenhouse gas will be significantly lowered to less than 94 grams of CO2 per kilometer, compared to 116 g/km in 2024, with a fine of 95 euros per gram exceeded, all multiplied by the number of vehicles registered.

Electric vehicles, which do not emit CO2 while driving, make it possible to lower the average emissions of manufacturers. According to analysts, large automobile groups risk several hundred million euros in fines per year in the event of exceeding the limit.

“Everyone is talking about 2035, in ten years, but we should be talking about 2025 because we are already in the hard part,” continued the CEO of Renault. “We need to be given a little flexibility. Setting deadlines and fines without being able to make that more flexible is very, very dangerous.”

Politicians and industry professionals are increasingly questioning whether to revise or abandon the ban on combustion engines, decided as part of the European Union’s objectives to decarbonise the continent since the European Parliament shifted to the right in the June elections.

Luca de Meo also spoke about the closure of one or more German sites announced last week at Volkswagen, his former home, but dismissed the idea that the diamond group would follow suit.

“The European automobile industry has had 30% overcapacity for 25 years. Fortunately, this is not the case for Renault because (…) a few years ago, we had to go on a very tough diet (…) so today we are operating at 90% capacity. I think we could be counter-cyclical, but the context is very complicated,” he said.

(Written by Nicolas Delame, with contributions from Gilles Guillaume)

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