Volkswagen stands out as one of the biggest beneficiaries of the European Union’s decision to relax the timing of its vehicle emissions targets, according to new calculations by market analysts and environmental researchers.
Based on 2025 fleet emissions data, Volkswagen would have faced hypothetical fines of between €1.7 billion and €2.2 billion under the EU’s original annual compliance rules, according to estimates by Dataforce and the International Council on Clean Transportation. Those penalties are now avoided after Brussels allowed carmakers to meet CO₂ targets on average over the 2025–2027 period rather than annually.
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Under EU regulations, each manufacturer has an individual fleet CO₂ target depending on the composition of vehicles it sells. For 2025, the Volkswagen Group is required to achieve an average of about 92 grams of CO₂ per kilometre, while rivals such as Mercedes-Benz and Smart face slightly lower thresholds. In 2025, however, the European Commission approved a change allowing manufacturers to offset weaker performance in one year with stronger results in subsequent years.
Although no fines will be imposed for 2025 alone, the interim figures highlight how exposed some automakers would have been. Dataforce estimates Volkswagen’s 2025 fleet emissions would have resulted in a fine of nearly €1.7 billion, while calculations cited by Der Spiegel based on ICCT data suggest penalties closer to €2.2 billion.
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By contrast, BMW was the only German manufacturer to meet its CO₂ target outright in 2025, according to both Dataforce and ICCT. Dataforce put BMW’s average emissions at 90.3 g/km, below its target of 93.9 g/km. Automakers such as Tesla, Toyota, BYD and Leapmotor also met their targets, largely due to high shares of battery-electric or low-emission vehicles.
Mercedes-Benz would have exceeded its individual target by a wide margin in 2025, but avoided any hypothetical fine through its CO₂ pooling arrangement with the Geely Group. Strong electric vehicle sales from brands such as Volvo, Polestar and Zeekr brought the pool’s average emissions well below its combined target.
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Within the so-called “Tesla Pool,” strong results from Tesla and Toyota helped offset higher-emitting partners such as Stellantis and Subaru. Stellantis would have faced a hypothetical fine of more than $1 billion due to its large sales volumes, while Subaru’s EU fleet emissions were estimated at nearly 170 g/km, far above its target.
Analysts stress that the figures are theoretical, as manufacturers could have taken mitigating actions had fines been unavoidable, including discounting electric vehicles or scaling back internal combustion engine production. “Manufacturers would likely have exhausted every other option before accepting fines,” said Peter Mock, ICCT’s Europe director, as quoted by Der Spiegel.
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Mock estimated that, under the original rules, automakers might have registered up to 500,000 additional battery-electric vehicles in 2025 to avoid penalties, often through discounts or self-registrations that would have weighed on margins. The revised EU framework, he said, has reduced the immediate pressure on manufacturers to push electric vehicle sales, with tangible effects on market dynamics.