Volkswagen Group may be issued a fine of more than €100 million (AU$157 million) for missing its European fleet emissions target by 0.5 grams per kilometre in 2020.
Despite cutting the average CO2 output of its vehicles by approximately 20 per cent last year, the European Union could still issue the penalty to Volkswagen Group for failing to miss its assigned target, news outlet Reuters reports.
The German car giant reported a European new-car emissions average of 99.8g/km for 2020 – 0.5g/km above its target, but delivering a reduction of 24.2g/km over its 2019 output.
The company says it has already made provision for the fine in its fourth-quarter earnings report.
This latest news is unrelated to the 'Dieselgate' scandal, in which Volkswagen Group was found in 2015 to have installed software in its models to actively bypass government tailpipe tests.
"We narrowly missed the fleet target for 2020, thwarted by the COVID-19 pandemic," Volkswagen Group CEO Herbert Diess said in a statement, but pointed to the company's roll-out of its electric range.
"This will allow us to achieve our fleet target this year," Mr Diess added.
Volkswagen Group reported a 335 per cent increase in sales of plug-in hybrid and fully-electric cars across Europe in 2020.
"Despite very ambitious efforts in electrification, it has not been possible to meet the set fleet target in full," Volkswagen Sustainability Council member Rebecca Harms said on the news.
"The key to success will be to give a greater role to smaller, efficient and affordable models in the electrification rollout," Ms Harms said.
"Volkswagen is clearly well on its way."