This one analysis It estimates the carbon dioxide (CO2) emissions targets that manufacturers will face in 2025 and compares them to the performance of their fleet in 2023 if it remained unchanged until 2025. The goal is to find out by how much percent a manufacturer must reduce CO2 emissions to meet the 2025 targets.

The main conclusions include:

• To meet the 2025 CO2 targets, manufacturers will need to reduce CO2 emissions by an average of 12 % compared to their 2023 fleet emissions. The required reduction for individual manufacturers that were not already below target ranges from 9 % to 21 %.
• By advantageously combining manufacturers, the range of required CO2 reductions could be narrowed to 6 % – 13 %, which is close to the average required reduction of 12 %.
• In an extreme case, if CO2 emissions from combustion engine vehicles remained constant, manufacturers would have to increase their market share of battery electric vehicles (BEVs) by a maximum of 8-18 percentage points within 2 years compared to 2023.
• For the hypothetical groups in this analysis, the required BEV market share growth would drop to 4–12 percentage points.

The report also states that the average CO2 reduction of 12 % required between 2023 and 2025 is approximately half the 23 % average fleet CO2 reduction observed between 2019 and 2021. In addition to increasing BEV market share, manufacturers can reduce the average CO2 emission levels of their combustion engine vehicles by supporting more efficient vehicles in their portfolio. In addition, the deployment of mild hybridization can reduce CO2 emissions by at least 7 % - 15 %, depending on the technology package.

Manufacturers can form groups to reduce CO2 emissions. The analysis found that creating hypothetical groups reduces the required CO2 reductions between 2023 and 2025 for all groups to a value close to the fleet average of 12 %. The share of BEVs required by hypothetical groups to meet the targets is more uniform than for individual manufacturers. While the increase in BEV share ranged from 8 to 18 percentage points for individual manufacturers, the hypothetical groups need to increase their BEV share by a maximum of 12 percentage points for Toyota-Renault-Nissan-Mitsubishi.

In addition, manufacturers have the opportunity to reduce the CO2 emissions of existing combustion engine vehicles. Within their existing model portfolio, manufacturers can adjust their sales strategy away from heavy, high-emission vehicles towards more efficient models. Spring 

Glossary of Key Terms

• BEV (Battery Electric Vehicle): Battery electric vehicle. A vehicle that is powered solely by electrical energy stored in a battery.
• CO2: Carbon dioxide. A greenhouse gas that contributes to climate change and is produced by burning fossil fuels.
• EEA (European Economic Area): European Economic Area. An association of EU countries and other countries (Iceland, Liechtenstein, Norway) that participate in the common market.
• ICEV (Internal Combustion Engine Vehicle): Internal combustion engine vehicle. A vehicle that is powered by the combustion of fossil fuels (petrol, diesel).
• NEDC (New European Driving Cycle): New European Driving Cycle. An older test procedure used to measure vehicle emissions and fuel consumption.
• PHEV (Plug-in Hybrid Vehicle): Plug-in hybrid vehicle. A vehicle that is powered by a combination of an internal combustion engine and an electric motor, with the battery also being able to be recharged from an external source.
• WLTP (Worldwide Harmonized Light Vehicles Test Procedure): A globally harmonized test procedure for light vehicles. A newer and more realistic test procedure for measuring vehicle emissions and fuel consumption that replaced the NEDC.
• ZLEV (Zero- and Low-Emission Vehicle): Zero or low emission vehicle. A vehicle that produces very low CO2 emissions (defined as 50 g/km or less).
• Utility Factor: A coefficient used in calculating the CO2 emissions of plug-in hybrid vehicles (PHEVs) that indicates the proportion of driving on battery electricity versus driving on the combustion engine. It expresses how much of the journey the vehicle completes in electric mode.
• Manufacturer Pools: Groups of manufacturers who have agreed to jointly meet CO2 targets.
• Mild Hybrid Technology: A technology that adds a small electric motor to an internal combustion engine to increase efficiency.
• Fleet-Average CO2 Target: The average CO2 emissions target for the fleet of new vehicles of a given manufacturer or pool of manufacturers.
• Type-Approval CO2 Emission Values: The official CO2 emission values that the vehicle achieved during the approval process.