European Carmakers Raising Prices Of Gasoline-Fed Cars

European automakers are increasing the prices of gasoline-powered cars and preparing discounts on electric vehicles (EVs) as they brace for a new challenge: stricter emissions rules that threaten to further erode profits in the already struggling industry, Gilles Guillaume and Alessandro Parodi reported for Reuters.

Companies such as Volkswagen and Stellantis in recent months have released profit warnings. I Photo: Volkswagen

Starting Jan. 1, the European Union (EU) will significantly lower its cap on automotive carbon dioxide emissions.

To avoid heavy fines, at least 20% of car sales for most manufacturers must be electric vehicles. However, data from the European Automobile Manufacturers' Association (ACEA) shows that so far this year, only 13% of all vehicles sold in the region have been electric.

"The gap is really big," said Marc Mortureux, director of the French car lobby PFA.

The stricter regulations come at a time when the industry is already grappling with excess capacity due to sluggish sales and growing competition from Chinese automakers.

This has prompted profit warnings from companies such as Volkswagen and Stellantis in recent months.

Now, automakers face the challenge of selling more EVs—which are costlier to produce than traditional vehicles—while political and economic uncertainties, as well as declining EV subsidies, continue to discourage buyers, Mortureux explained.