PSA on track to escape CO2 fines, Tavares says

PSA Group has met its EU CO2 emissions target so far this year, helped by strong sales of diesel cars and low emissions electrified vehicles.

"We said that being compliant on CO2 in Europe is a must for PSA and we have been delivering this on a monthly basis. We achieved this in January and in February,” PSA CEO Carlos Tavares said.

Strong sales of full-electric and plug-in hybrid cars are helping to keep down PSA's CO2 average, Tavares said in a web conference call on Tuesday that took place instead of interviews with journalists at the canceled Geneva auto show.

Tavares said that PSA was able to be compliant so far with its 2020 CO2 target of 93g/km because sales of low emissions vehicles (LEVs), an EU definition that includes battery-powered models and plug-ins, currently account for 6 percent of the automaker's sales in Europe. Two years ago Tavares predicted that PSA would need 7 percent of its sales to be LEVs to stay in line with its EU target.

"A 7 percent rate was needed in a worst-case scenario of the diesel share in Europe collapsing to 10 percent. Our diesel sales have stabilized at about 30 percent and so we are compliant with sales of LEVs of about 6 percent," Tavares said.

PSA currently sells four battery-electric cars, including the electric versions of the Peugeot 208 and Opel Corsa small cars, and six plug-in hybrids.

Tavares said that penetration of LEV variants in model lines that have them range from 10 percent to 20 percent.

As part of the European Union's efforts to combat climate change, PSA must cut its fleet CO2 emissions to 91.6 grams per km by 2021 or face fines.

Automakers will struggle to meet their targets because of falling sales of diesel cars, which emit less CO2 than gasoline cars, analysts say. PA Consulting predicts that PSA's emissions in 2021 will fall 4g short of its target, leaving the automaker facing a 938 million euros fine.

Separately, the new CEO of PSA's upscale DS brand, Beatrice Foucher, said that 30 percent of sales of the DS7 Crossback midsize SUV are plug in hybrids and 18 percent of sales of the the DS3 Crossback small SUV are the full-electric E-Tense version.