I don’t think it’s quite problematic given the options available. In 2021, it was facing a penalty of 9.2 billion euros emission fine according to Jato Dynamics estimates but was able to meet its emissions target thanks to doubling of BEV deliveries and pooling. The 16.7% market share is not too high in my opinion given that Volkswagen wants to grow its worldwide BEV share to 20% by 2025. This implies a BEV share of around 30% in Europe (in 2023, Europe BEV share was around 50% higher than the worldwide BEV share).
According to Forbes, Volkswagen wants to improve fuel efficiency by 10-15% in every vehicle redesign. Assuming fuel efficiency of 1.5 million passenger cars registered in Europe in 2025 are improved by 12.5% and market share of BEVs improves to 16.7% in 2025, Volkswagen passenger cars will miss the emission target by 9.05. This will lower the penalty to 2.8 billion euros from 5.3 billion euros (arrived at without improving CO2 efficiency) and Volkswagen will need a pooling partner to provide 219,358 EVs instead of 403,181. The company will pay a pooling fee of 575 million euros as a result.
I don’t think the demand for pooling in 2025 will exceed that of 2021. This is because 2021 emission targets were tougher than those of 2025. Companies such as Stellantis, Hyundai, Volvo, BMW, which were far away from achieving their emission target in 2021 are now close to meeting their 2025 target. Also, the regulation allows pooling with multiple partners, hence eliminating instances where supply of EV pools is limited. For instance, Fiat and Honda separately entered into a pooling agreement with Tesla. Likewise, Volkswagen entered into a pooling agreement with Aiways, LEVC, Next.e.Go, and SAIC.
I haven’t been able to find insights on whether there could be a change in political stance with regard to the emission targets. At the moment (30% confidence level), I don’t expect any political change until 2026 when the commission will review the effectiveness of the CO2 standards. Also, much of the political contention (from German government) on the emission targets have been on the exemption of e-fuels from 2035 and not the 2025 targets.