(BFM Stock Exchange) – The president of the European Commission, Ursula von der Leyen, announced a softening proposal on CO2 emission targets this year. The objective remains but would be evaluated over three years and not a year. The actions of European manufacturers took off following this announcement.

It was clearly the elephant in the fellowship for European manufacturers this year: European regulation in terms of CO2 called “CAFE”.

In 2025, a regulatory screw round took place on this regulation, with drastically lowered CO2 emissions for car manufacturers. According to Bank of America, the reference target is 94 grams of CO2 per kilometer, against 110 grams in 2021. This new target was described as “painful and perhaps unattainable” by the American bank.

Fearing not to sell enough electric vehicles to avoid fines due to non-compliance with these thresholds, some manufacturers have made “pooling” agreements (basically CO2 credit purchases) with Tesla.

Luca de Meo, the director general of Renault and also president of the European Association of European Manufacturers (ACEA), had called on the European Commission to demonstrate more flexibility.

“I hope the authorities will listen to our alert,” he told analysts. However, the European Commission will present, on March 5, an industrial action plan for the automobile.

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Flexible

Its president, Ursula von der Leyen this Monday ended the suspense by announcing that the European Commission would propose a relaxation of this European framework.

Concretely, the CO2 emission targets by vehicle and by manufacturers remain unchanged but will be appreciated over three years rather than in 2025 alone.

The manager defended a “balanced” measure, granting more room for maneuver without changing the target. And thus hearing “the voices” which called “to more pragmatism in these difficult times,” said Ursual von der Leyen.

This “targeted amendment” will still have to be approved by the European Parliament and the European Council. But the announcement had its effect on the stock market.

Renault and Volkswagen took more than 5% in the wake of the Ursula von Der Leyen Declaration. The two groups still earned 1.4% and 2.3%, respectively, around 4:30 p.m. BMW won 0.9%, Mercedes-Benz 1.6%and Stellantis 0.3%.

“Although this announcement does not constitute a relaxation of the objectives, the proposal would allow companies to reserve or borrow the emissions of their fleet compared to the objective over a period of three years (2025-27)”, underlines Bernstein, in a note published this Monday.

“This measure is particularly useful because most of the equipment manufacturers have argued that the launching rate of their new electric vehicles will have its strongest impact from 2026,” added the financial intermediary.

Important for Volkswagen

“The announcement will be the most useful for the latest equipment manufacturers,” continues Bernstein, who quotes Volkswagen. The latter “is in the grip of delays in software and platforms, which forces him to strongly encourage sales of his ID.3 (via for example discounts, editor’s note) until he can launch the ID.2 at 25,000 euros in 2026”, underlines Bernstein.

In a report published at the end of January, Bank of America estimated that to comply with CAFE, Renault and Volkswagen regulation, the two manufacturers most exposed to this regulatory risk, should take measures that would represent 1.3 point of operational margin for the French group and 0.7 points for the German manufacturer.

Renault himself had indicated integrating a negative impact of 1 percentage point linked to CAFE regulation in its operating margin forecast for 2025.

“While uncertainty remains with regard to the 2025 coffee requirements (…), a more flexible approach (multi -year average, progressive introduction, etc.) associated with additional measures to support the demand for electric vehicles would be clearly positive for Renault, which is the equipment supplier most exposed to this question”, underlined two weeks ODDO BHF.