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Time is running out for carmakers in Europe. Just six months out from stiff new emissions rules, the industry is facing up to an estimated 34 billion euros ($39 billion) in penalties as well as eroding profits from selling more electric cars.

Starting in 2020, car fleets in Europe will need to meet more stringent regulations on how much carbon dioxide they’re allowed to release. The industry is ill prepared for the looming change, and the huge fines pending for subverting the new rules could prompt some brands to abandon the European market and test the mettle of those that remain.

The threat is part of a broader pileup: vehicle sales are falling in key markets around the world, and the U.S. is exchanging blows on trade with China and the European Union, threatening to raise costs and rattle the global economy. Worse yet, automakers have been unable to pry buyers from the highest-emission cars, such as the Mercedes-AMG GLE 63 S sport utility vehicle that spouts more than three times the carmaker’s targeted CO2 fleet level from 2020.

“In an industry that is already suffering from global trade issues, from Brexit, from peaking sales, that’s a very, very dangerous cocktail,” Evercore IS auto analyst Arndt Ellinghorst said on a call earlier this month regarding the EU emissions issue.

Fines could mount to 34 billion euros through 2021, according to research firm Jato Dynamics, whose projection tracks with other industry estimates. While the new regulations are expected to be painful for the industry to adjust to, past precedent suggests the EU is unlikely to allow Europe-based carmakers to be driven to ruin.

Volkswagen AG, the world’s biggest carmaker, faces the largest penalty at about 9 billion euros based on 2018 reported emissions, followed by Peugeot maker PSA Group and Fiat Chrysler Automobiles NV – the company with the single largest gap between actual performance and the new targets. BMW AG and Daimler AG could see earnings drop sharply due to their heavy reliance on high-emission SUVs.

Toyota Motor Corp., maker of the Prius and several other hybrids, was the only automaker to see its emissions fall last year in Europe, according to Jato.

While its calculation doesn’t take into account a blitz of upcoming electric models like Volkswagen’s ID.3 hatchback and Porsche Taycan, European Environment Agency data show emissions rising – not falling –for the past two years to a four-year high in 2018.

“It’s not quite an existential problem yet, but there are going to be questions of how do you explain to shareholders that I’m losing so much money, and it’s going to create immense pressure,” Michael Schweikl, managing consultant responsible for automotive at PA Consulting Group, said in an interview.

Starting Jan. 1, all but 5% of the EU’s car fleet can emit no more than 95 grams of carbon dioxide per kilometer driven. One year later, no new vehicle can exceed that level. Fines of 95 euros per gram for each car over the target will add up quickly, driving automakers to speed up the electrification of their lineups by offering more gasoline-electric hybrids and cars fully powered by batteries.

“I have never seen such a material event risk in my career,” Evercore’s Ellinghorst warned in a research note to clients last month under the subject line “The 2020 CO2 cliff.”

Automakers aren’t panicking – yet. PSA expects to be compliant from day one and won’t pay any fines, a spokesman said. Electrified versions of half its lineup will be available by 2021, and across its entire product range four years later, he said. But in 2018, sales of EVs and hybrid vehicles accounted for less than 1% of PSA’s registered sales.

The 2020 limits were agreed to in 2014 after years of back-and-forth on balancing a reduction in emissions while not costing carmakers too much. What no one foresaw was the extent of consumers’ love affair with gas-guzzling SUVs and Volkswagen’s diesel-emissions cheating scandal that surfaced the following year.

Diesels, which emit about a fifth less CO2 than equivalent gasoline cars, were a key plank in carmakers meeting the tighter regulation. But some European cities have started to ban diesels, leaving the cars to languish on dealer lots.

The new rules may prompt some brands without a strong presence in Europe to abandon the market altogether, said Ellinghorst.

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