Jaguar Land Rover struggling on EU CO2 emission fines, says GlobalData

Following the news that Tata-owned Jaguar Land Rover (JLR) has set aside GBP90 million in expectation of missing EU average CO2 fleet targets in 2020 and therefore incurring a penalty;

Mike Vousden, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view: 

“JLR is emerging as one of the manufacturers struggling to meet EU average CO2 emission targets. It has added around GBP90 million ahead of potential penalties it may have to pay as it battles to bring its fleet’s average CO2 emissions below 132g/km. This figure represents an increase from the GBP58 million JLR had set aside at the end of Q2 2020.

“In recent years, JLR has struggled to shift away from diesel engines that, previously, made up the majority of its sales but are now waning in Europe due to fallout from the 2015 diesel emissions scandal. In addition, sales of its I-Pace electric car have not accounted for as large a proportion of sales as JLR might have hoped.

“One of the biggest issues that directly led to JLR missing its short-term emissions targets, however, was the news that it would have to delay the introduction of the Discovery Sport PHEV and Evoque PHEV, which both failed to meet their stated emissions targets when tested. The latter model, for example, was claimed to emit 32g/km of CO2 and have an electric-only range of 66km but, when tested in WLTP conditions, could only achieve 44g/km of CO2 with an electric-only range of 43km.

“So far in 2020, JLR has introduced five PHEV models across its range including the popular Jaguar F-Pace SUV and newly released Land Rover Defender. In addition, the group has confirmed that it will launch a PHEV version of its E-Pace compact SUV. Assuming those launches go without a hitch and account for the proportion of sales JLR expects, it may avoid CO2 fines in 2021.

“A 2019 analysis by GlobalData showed that the vast majority of vehicle makers would face CO2 fines, even if their fleet emissions declined annually by 7.5% between 2018 and 2021. Now, the position looks brighter for many automakers due to electric vehicles (EVs) and hybrids taking a much larger share of vehicle sales in Europe under coronavirus conditions that have seen many governments further incentivize the purchase of EVs and hybrids, with sales of those models finally overtaking diesel in October 2020.”

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