Some of the world’s top carmakers could be facing up to $4.8bn (£3.3bn) in penalties for non-compliance on their fleet emissions.
A report analysing 15 of the world’s largest automakers with combined market capitalisation of $846bn, has found that tightening regulations on emissions are having a significant business impact in the wake of the Volkswagen scandal six months ago.
The report, using data from climate change research provider CDP, found that Volkswagen was not the only carmaker potentially facing significant penalties as regulations on fleet emissions tighten around the world with seven carmakers could face nearly $5bn in penalties (from the EU and US combined) for non-compliance on their fleet emissions.
The two US car giants General Motors and Ford are the companies at most notable risk – their penalties could potentially equate to a combined $1.8bn (114% of Earnings before Interest & Tax (EBIT)) and $1.2bn (27% of EBIT) respectively.
The report also identifies several automakers who have taken a lead on advanced vehicles which puts them at a competitive advantage, especially in light of the Paris Agreement to limit emissions reached last December and increasing measures to disadvantage diesel vehicles. Nissan, Renault and Volkswagen are the only carmakers to receive an A-grade from CDP in this area. Volkswagen launched five new models of advanced vehicles last year, contributing to a three-fold increase in advanced vehicles sales volume globally.
CDP chief executive Paul Simpson said: “It’s time for car makers to take climate change seriously. Six months on from the VW emissions scandal, today’s new investor research shows that too many companies still fall short in the light of stringent regulation and possible penalties on fleet emissions and that’s a significant risk for the sector as a whole.”
The seven companies exposed to the risk of potential penalties in the EU and/or US: