Volkswagen brand says profitability drive faces climate cost risks

From Reuters - March 14, 2018

WOLFSBURG, Germany (Reuters) - Volkswagens (VOWG_p.DE) core VW autos division said on Wednesday that EU requirements on curbing emissions and other climate-related demands would cause profitability to stall between 2018 and 2020.

Profits would be hit even as earnings, sales and deliveries at the German firm were forecast to hit new records this year, VW brand executives told a media briefing.

The European Union has proposed tougher vehicle emissions targets for 2025 and 2030 to reduce carbon dioxide (CO2) and other greenhouse gases. Carmakers, which are racing to develop electric vehicles (EVs), can be fined for violating the limits.

The VW brand shoulders the bulk of Volkswagen groups development spending, as well as costs related to the dieselgate emissions scandal.

VW finance chief Arno Antlitz said VW faced heavy financial demands due to bottlenecks expected from introducing so-called WLTP lab tests related to car emissions and fuel consumption, regulations to curb CO2 emissions and EV development costs.

The CO2 fleet targets will certainly pose the greatest challenge for us as a company until the year 2020, VW brand chief executive Herbert Diess said.


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