The European Union has imposed a total of 458 million euros in fines on several major automakers for violating recycling rules. Volkswagen will have to pay the highest fine, amounting to around 128 million euros. Mercedes-Benz, the only German automaker not to face a fine, had negotiated with other companies and is therefore exempt.
The fines are a result of illegal cartel agreements among the automakers, which the EU had previously banned in a 2002 regulation. The companies had agreed not to pay for the recycling of old vehicles, as required by the EU and also agreed not to publicly disclose the percentage of recyclable materials in their vehicles.
The automakers had argued that they could still make a profit from the sale of old vehicles, even if they were no longer roadworthy. However, many of these vehicles are actually exported, often to Africa, where they can continue to be used. Mercedes-Benz, in particular, has a high rate of export and even the vehicles that do end up in Germany are often disassembled and re-exported in containers.
While the fines may seem high, they are a relatively small percentage of the automakers’ annual profits. Volkswagen, for example, still made a profit of 12.5 billion euros in 2024, despite a 30% decline in sales, which is almost a hundred times the amount of the fine.
If the automakers are now required to take on a portion of the costs of recycling at the end of a vehicle’s life, it could have a significant impact on the sale of electric vehicles in particular, as the option to export them to countries with limited infrastructure is no longer available.