German car giant Volkswagen said Thursday it "narrowly" failed to meet tough new EU emissions targets in 2020 despite a spike in sales of environmentally-friendly electric cars.

The VW group -- which includes the brands Audi, Porsche and Skoda -- now risks a fine of around 140 million euros ($170 million), according to AFP calculations.

VW said CO2 emissions from its passenger-car fleet decreased "by around 20 percent" year-on-year, helped by a fourfold increase in the numbers of electric and hybrid vehicles sold in Europe.

"We narrowly missed the fleet target for 2020, thwarted by the Covid-19 pandemic," Volkswagen chief executive Herbert Diess said in a statement.

He added that new electric models across several brands would "allow us to achieve our fleet target this year".

Under European Union legislation that came into force last year, manufacturers' fleets of newly sold cars must emit on average less than 95 grammes of CO2 per kilometre, or face hefty fines from 2021.

The VW group said it missed the emissions target by around 0.5 grammes per kilometre.

To comply with the new EU pollution limits, auto companies across the industry must massively increase their sales of electric and hybrid cars.

VW had anticipated missing 2020's carbon-emissions target, it said, and set aside provisions to pay for fines to avoid any impact on its fourth-quarter 2020 results.

The VW and Audi brands individually met their carbon emissions targets for 2020, but the group as a whole fell short.

The group sold 315,400 electrified vehicles in 2020 to the EU, UK, Norway and Iceland, up from 72,600 in 2019.

It is the market leader for battery-powered vehicles in western Europe, with a share of around 25 percent.

German rival Daimler said earlier this month that it expects to meet the EU emissions targets, while luxury brand BMW has said it has "more than" complied with the new rules.

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