PA Consulting Group’s annual forecast of car manufacturers’ performance against mandatory EU CO2 emissions targets suggests Volkswagen, BMW, Hyundai-Kia and Jaguar Land Rover will miss their 2021 targets, leaving them facing large fines and further reputational damage.

In PA’s most recent ranking of the top 13 European carmakers’ performance against EU CO2 emission targets for 2021, analysis shows Peugeot Citroen still remains at the top of the table. Fiat Chrysler comes in second and has overtaken Renault-Nissan at number three, with Toyota remaining in fourth place. These four carmakers, along with Volvo, all look set to meet their individual emission targets in 2021.

Ford has climbed to fifth place from seventh and outperforms Hyundai-Kia which has slipped to seventh. GM has retained its position at sixth in the table. Daimler still falls short of its target, but has made the most progress and reduced CO2 emissions over the year, overtaking BMW and moving from twelfth to tenth position.

Hyundai-Kia was previously on course to meet its 2021 target but has seen a particularly dramatic decline in performance and is now likely to miss its target. They were the only manufacturer to increase CO2 emissions, reflecting the fact that their petrol and diesel engines are not as efficient as their competitors, emitting 10 grams more CO2 than Ford.

BMW’s results reflect their high sales of heavy SUVs and low take-up of its hybrid and electric offering. The same is true of VW whose sales of hybrid and electric vehicles make up 0.1% and 0.2% of their total.

The cost of these failures will be high, as the EU is planning to fine manufacturers €95for every gram of CO2 above the company-specific target. BMW will, based on current sales forecasts, have to budget for around €100m in penalty payments; Hyundai-Kia €300m and Volkswagen around €1bn.

Thomas Göttle, automotive expert, PA Consulting Group, said: “Manufacturers are already struggling to meet the EU targets but these challenges are only going to get worse. The EU plans to change the testing regime in 2017 to measure emissions in real driving conditions. This will make the test much harder and we forecast that under this new test cycle, not a single carmaker will reach its specific CO2 target by 2020/2021.

“Carmakers must take steps to optimise their engine performance, cut vehicle weight and reshape vehicle portfolio in order to reduce and meet their emissions targets for 2021 and reduce the risk of incurring penalties.”