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(Bloomberg) -- Volkswagen AG estimated it will take a €1.5 billion ($1.6 billion) hit this year from stricter European Union standards for car emissions that the manufacturer will struggle to meet.
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The anticipated costs include potential penalties for exceeding the EU’s tougher emissions target, Rolf Woller, VW’s head of investor relations, told analysts on a call Wednesday. The company also expects earnings to be eroded by having to sell more electric vehicles at the expense of more profitable combustion engine models.
Some manufacturers and lawmakers have urged the EU to review its emissions standards as the auto industry struggles with disappointing EV demand and an influx of Chinese competitors. The rules benefit US carmaker Tesla Inc., which will be compensated for pooling the fleet of EVs it sells this year with manufacturers including Toyota Motor Corp., Stellantis NV and Ford Motor Co.
After a difficult 2024, VW’s outlook for this year is clouded by its namesake brand lacking any new electric models to offer. This will complicate Chief Executive Officer Oliver Blume’s bid to restructure the industrial behemoth, which is reeling from overcapacity and intensifying competition.
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