LONDON -- Jaguar Land Rover has set aside 90 million pounds ($118 million) to pay a likely European Union fine for failing to meet its CO2 emissions reduction target.
The automaker expects to miss its goal because of delays in launching new plug-in hybrid vehicles, which emit less CO2 than diesel and gasoline models.
"We are not happy that we will not be compliant in 2020, but a lot of that has been taken out of our hands," JLR CFO Adrian Mardell told investors during the automaker’s quarterly earnings call Tuesday.
As part of its plans to tackle climate change, the EU requires automakers selling cars in the bloc to cut fleet average emissions of new cars to 95 grams per km this year. Each automaker has an individual target, largely based on the weight of the cars they sell.
JLR’s strategy to reach its target has been to launch more plug-in hybrid versions of its Land Rover, Range Rover and Jaguar SUV models, but the automaker hit a setback when it was forced to halt sales of the plug-in hybrid versions of its two best-selling vehicles, the Range Rover Evoque and the Land Rover Discovery Sport, due to a discrepancy over their emissions figures.
Mardell said JLR has now increased the amount it set aside to pay potential EU penalties to 90 million pounds in the third quarter from 58 million pounds at the end of the second quarter.