EU Emissions Rules Push European Automakers to Raise Petrol Car Prices and Discount EVs

Automakers face tightened 2025 carbon limits requiring 20% EV sales, risking billions in fines if targets are missed.

The European Union will lower automotive CO2 emissions caps on January 1, requiring at least 20% of car sales to be electric to avoid heavy fines.
Currently, only 13% of new cars sold in Europe are electric, leaving automakers scrambling to close the gap before the deadline.
Volkswagen, Stellantis, and Renault have raised petrol car prices by several hundred euros while discounting EVs to make the latter more appealing to buyers.
Analysts warn this pricing strategy could backfire, potentially reducing demand for both petrol and electric vehicles and harming supply chains.
Automakers are also contending with declining EV subsidies, economic uncertainty, and growing competition from lower-cost Chinese EV brands.