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Volkswagen (VWAGY) Lags 2020 EU Emissions Target, Fined $121M
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Volkswagen AG (VWAGY - Free Report) has been slapped a fine of more than 100 million euros ($121 million) for narrowly missing compliance with the EU targets on carbon dioxide (CO2) emissions with regard to its 2020 passenger car line-up.
Amid the heightening concerns on global warming and air pollution, European policymakers have tightened rules on exhaust emissions, making it imperative for automakers to ramp up the development of low-emission technology or face a penalty of 95 euros per gram of excess CO2 their vehicles emit.
Per the Germany-based auto giant, it had trimmed the average CO2 emissions for its fleets across Europe by about 20% to 99.8 g/km in the past year compared with 2019, but it was still 0.5 g/km above the EU target. Volkswagen had already anticipated this shortfall, and put aside an unconfirmed level of provision to avoid any adverse impact on its fourth-quarter earnings.
Still, the fine came in as a major disappointment for the company which has been working aggressively to rev up its electric vehicle (EV) game amid the stiff competition posed by the EV behemoth Tesla (TSLA - Free Report) and various other legacy carmakers. Reportedly, Volkswagen’s German rivals, Daimler AG and BMW AG (BAMXF - Free Report) , have managed to meet its CO2 standards in Europe thanks to a rise in plug-in hybrid sales toward the end of last year.
As it is, disruptions related to the coronavirus pandemic has aggravated the obstacles Volkswagen was facing in launching its battery-powered ID.3 hatchback, which went on sale much later than expected.
Having said that, Volkswagen confirmed being well on track to becoming a carbon-neutral company. In fact, its delivery count of EVs in the EU, as well as Britain, Iceland and Norway, more than quadrupled in 2020 to 315,400 units, making the auto giant one of the leading names in the EV market, with a foothold of about a quarter of the all-electric market in western Europe.
Its core Volkswagen and Audi brands have more than fulfilled their CO2 fleet targets owing to the launch of popular electric models, with more models in the pipeline. Its Cupra sports car and Skoda brands are also slated to roll out new EVs shortly.
Volkswagen has been making countless efforts to take its EV game a notch higher. It is reducing the number of internal combustion-engined cars in its line-up and is restructuring more factories to build EVs. On account of the stringent EU standards on carbon emissions, the company expects to expand the proportion of hybrid and electric vehicles in its European sales to 60% by 2030, way up from the previous target of 40%.
Reportedly, the company is also pooling its CO2 emissions with electric automakers like MG Motor, Aiways and others in a pooling arrangement that is permitted by EU regulators.
The auto biggie anticipates meeting the 2021 carbon emission target much easily, owing to the revamped production of new all-electric models on the MEB architecture, especially the VW ID.4 electric SUV and Skoda Enyaq compact crossover.
Volkswagen had admitted in 2015 to using illegal software in diesel cars, which allowed it to cheat emission tests. The shadow of this scandal continues to loom large over the company, costing it a reported $30 billion in fines, provisions and vehicle refits.
Shares of the company have appreciated 8% in the past year compared with the industry’s rise of 44.8%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Image: Bigstock
Volkswagen (VWAGY) Lags 2020 EU Emissions Target, Fined $121M
Volkswagen AG (VWAGY - Free Report) has been slapped a fine of more than 100 million euros ($121 million) for narrowly missing compliance with the EU targets on carbon dioxide (CO2) emissions with regard to its 2020 passenger car line-up.
Amid the heightening concerns on global warming and air pollution, European policymakers have tightened rules on exhaust emissions, making it imperative for automakers to ramp up the development of low-emission technology or face a penalty of 95 euros per gram of excess CO2 their vehicles emit.
Per the Germany-based auto giant, it had trimmed the average CO2 emissions for its fleets across Europe by about 20% to 99.8 g/km in the past year compared with 2019, but it was still 0.5 g/km above the EU target. Volkswagen had already anticipated this shortfall, and put aside an unconfirmed level of provision to avoid any adverse impact on its fourth-quarter earnings.
Still, the fine came in as a major disappointment for the company which has been working aggressively to rev up its electric vehicle (EV) game amid the stiff competition posed by the EV behemoth Tesla (TSLA - Free Report) and various other legacy carmakers. Reportedly, Volkswagen’s German rivals, Daimler AG and BMW AG (BAMXF - Free Report) , have managed to meet its CO2 standards in Europe thanks to a rise in plug-in hybrid sales toward the end of last year.
As it is, disruptions related to the coronavirus pandemic has aggravated the obstacles Volkswagen was facing in launching its battery-powered ID.3 hatchback, which went on sale much later than expected.
Having said that, Volkswagen confirmed being well on track to becoming a carbon-neutral company. In fact, its delivery count of EVs in the EU, as well as Britain, Iceland and Norway, more than quadrupled in 2020 to 315,400 units, making the auto giant one of the leading names in the EV market, with a foothold of about a quarter of the all-electric market in western Europe.
Its core Volkswagen and Audi brands have more than fulfilled their CO2 fleet targets owing to the launch of popular electric models, with more models in the pipeline. Its Cupra sports car and Skoda brands are also slated to roll out new EVs shortly.
Volkswagen has been making countless efforts to take its EV game a notch higher. It is reducing the number of internal combustion-engined cars in its line-up and is restructuring more factories to build EVs. On account of the stringent EU standards on carbon emissions, the company expects to expand the proportion of hybrid and electric vehicles in its European sales to 60% by 2030, way up from the previous target of 40%.
Reportedly, the company is also pooling its CO2 emissions with electric automakers like MG Motor, Aiways and others in a pooling arrangement that is permitted by EU regulators.
The auto biggie anticipates meeting the 2021 carbon emission target much easily, owing to the revamped production of new all-electric models on the MEB architecture, especially the VW ID.4 electric SUV and Skoda Enyaq compact crossover.
Volkswagen had admitted in 2015 to using illegal software in diesel cars, which allowed it to cheat emission tests. The shadow of this scandal continues to loom large over the company, costing it a reported $30 billion in fines, provisions and vehicle refits.
Volkswagen currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of the company have appreciated 8% in the past year compared with the industry’s rise of 44.8%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>