T&E Analysis: Record Profits, But No Money for Euro 7 Technology

The European environmental umbrella organization Transport & Environment (T&E) has accused car manufacturers of not wanting to allocate funds for further improvement of combustion engine technology despite significantly increased profits as part of the EU's Euro-7 plans. A new analysis shows that the five major automotive groups have more than doubled their annual profits by 64 billion euros since 2019. According to EU calculations, the current Euro-7 proposal would cost between 90 and a maximum of 150 euros per vehicle.

The NGO advocates for even more ambitious limits, arguing that pollutants from road traffic cause 70,000 premature deaths annually. Europe's largest car manufacturer Volkswagen (VW) would incur costs of 5.7 billion euros throughout the implementation period for more ambitious regulations—37 percent of VW's 2022 annual profit, according to the analysis. T&E judged the EU Commission's proposals as weak since they lagged far behind recommendations from EU experts and retained the emission limits for petrol vehicles set more than a decade ago.

"But currently, the car industry rejects even the weak proposal on the grounds that it would be too expensive. At the same time, the five largest European car manufacturers have all increased their profit margins compared to the pre-pandemic period, even though they sold 25 percent fewer cars combined," the organization further criticized.

For example, BMW almost tripled its profit margin in 2022 compared to 2019, while Stellantis more than doubled it—as a result of a sector-wide shift from affordable small cars to more expensive premium vehicles. The NGO criticized that automotive groups are scrapping affordable cars like the Fiat Punto in favor of profits but still claim that EU air pollution regulations make cars too expensive for regular drivers.

"The car industry maximizes its profits by focusing on expensive luxury vehicles. At the same time, manufacturers claim that simple pollution regulations would make cars unaffordable. The EU must explicitly put the air we breathe and public health before the industry's profits," demanded Sebastian Bock, Managing Director of T&E Germany.