As the European Union's (EU) strengthened new car carbon emission regulations enter their second year of application, the regulatory compliance results for Hyundai Motor and Kia have diverged. Kia entered the target achievement zone with carbon emissions below the regulatory target, while Hyundai Motor is exceeding the target. Analysis also emerged estimating that Hyundai Motor's potential fine burden reaches 600 billion won based on current emission performance.
According to industry sources on Tuesday, in the 'September 2026 European Automobile Market Monitor' released by the International Council on Clean Transportation (ICCT) on the 23rd, Kia's average carbon dioxide (CO₂) emissions from new cars from January 2025 to September this year were recorded as 5g per km lower than the regulatory target for 2025–2027. In contrast, Hyundai Motor exceeded the target during the same period.
Kia's regulatory compliance performance is improving. Emissions that were 4g below the target on a cumulative basis through last August improved to a level 5g below the target in the September tally. Kia's share of new pure electric vehicle (BEV) registrations in Europe last month was 44%, significantly exceeding the European average of 31%. It appears that the expansion of electric vehicle sales contributed to lowering the average carbon emissions of all new cars.
On the other hand, Hyundai Motor is increasing electric vehicle sales, but its cumulative emissions have exceeded the regulatory target. According to Daishin Securities, Hyundai Motor's potential carbon emission regulation fine is estimated to reach approximately 600 billion won based on ICCT's performance from last year through August this year.
Calculated in the same manner, Volkswagen's potential fine reached 620 billion won, and Stellantis' reached 240 billion won. Among the major 13 manufacturers and manufacturer pools tallied by ICCT, four companies—Hyundai Motor, Volkswagen, Stellantis, and China's SAIC Motor—are currently falling short of carbon emission regulatory targets.
This is a simple estimate applying statutory fine rates to current new car sales volumes and excess regulatory emissions. It is not an amount confirmed for actual imposition. The EU stipulates that if a complete vehicle manufacturer exceeds its emission target, a fine of 95 euros per newly registered vehicle is imposed for each 1g/km of the excess.
In June last year, the system was revised to evaluate compliance with new car carbon emission regulations based on a three-year average from 2025 to 2027, rather than annually. This created a grace period between the time of regulatory application and the final assessment. Even if the target is exceeded by this year, fines can be avoided by increasing electric vehicle sales in 2027 to meet the three-year average. Although Hyundai Motor and Kia belong to the same group, they are classified as separate manufacturers, and their emission performance is calculated separately.
Differences are also emerging in the European sales trends of both companies. According to the Association of European Automobile Manufacturers (ACEA), Hyundai Motor's European sales volume in September last year was 39,821 units, a decrease of 17.5% compared to the same month of the previous year. In contrast, Kia increased by 13.7% to 56,437 units. Cumulative sales from January to September this year also decreased by 13.2% for Hyundai Motor, while Kia increased by 6.6%.
The gap was particularly large in pure electric vehicle sales. In September last year, Kia's European pure electric vehicle sales volume increased by 157% compared to the same month of the previous year. During the same period, Hyundai Motor's growth rate was only 2%. Unlike Kia, which expanded its electric vehicle lineup including EV2, EV3, EV4, and EV5 to increase sales, Hyundai Motor is experiencing sluggish sales of its existing main models.
With just over a year remaining until the final assessment, the actual fine amount may change, so Hyundai Motor's new car deployment and sales strategy are expected to determine future regulatory compliance performance.
in INDUSTRY
