The British automaker has allocated 99.5 million euros to pay a possible penalty from the European Union for CO2 emissions, Jaguar Land Rover CFO Adrian Mardell said at a quarterly meeting with investors. According to him, this is largely due to force majeure, in connection with which the JLR cannot meet the CO2 standard.
Jaguar Land Rover has a less stringent European CO2 emission standard. To avoid a fine, the group must cut emissions to 130.6 grams per km, but that probably won’t be able to do this this year, Mardell said. He has already set aside the money to pay a possible fine.
“We are unhappy that in 2020 we will not meet the requirements. We hope that 90 million is the worst case scenario, ”he said in an interview with investors. At the end of the second quarter, the penalty for CO2 emissions was still 64 million euros. Mardell expects the mass adoption of plug-in hybrids to help JLR reduce emissions somewhat.
Thus, the final amount of the fine has not yet been determined, but apparently, JLR considers it already grim. Mardell says the group will not be able to meet its CO2 emissions target mainly due to force majeure. For example, the coronavirus delayed certification of the Discovery Sport and Range Rover Evoque P300e, leading to the introduction of already certified vehicles with the worst emissions to the market, and this clearly adversely affected the average value. The situation was also not helped by the fact that the launch of these models on the market was postponed.
The nearly € 100 million fine could cause JLR’s profits to largely evaporate. The fact that Mardell has already postponed the fine in the budget indicates that JLR is likely to suffer losses.