EU CO2 targets becoming a real challenge for most car manufacturers

For the second time since 2017, JATO Dynamics has invited its customers to the Business Networking Event at the IAA in Frankfurt. The event focused on one of the most important questions the automotive industry will face in the coming years: Will the industry be able to meet its CO2 emission targets for 2020/21? As a matter of fact new cars in Europe may only emit a maximum of 95 grams of CO2 per kilometer on average. And that from 2020 and until 2021 at the latest. Each additional gram will then cost 95 euros – per car! If one were to assume the current situation, the industry would have a problem from 2021: the penalty would then amount to an incredible 33.6 billion euros.

So will the manufacturers be able to achieve the CO2 emission targets for 2020 and what are the consequences? What happens if from 2021 onwards the equipment options are included in the WLTP? And are trends already discernible in the strategies for compliance? One thing can be clearly determined: For the automotive industry, things are slowly getting tight. And that only a few months before January 1, 2020. Admittedly, the industry has recognized the seriousness of the situation. There is a slight change in models on the horizon as CO2-relevant options are likely to become more expensive. However, the fact that almost everything has risen in recent years is now having an impact. Average CO2 emissions, average engine power, number of heavy SUVs…but also the number of start-stop systems.

The graph shows the emissions performance report of October 2019. It shows that it will be hard to meet the CO2 target in 2021.

But the trend does not bode well

Between 2018, the year of the WLTP launch, and the first half of 2019, for example, the average CO2 fleet value in the EU rose from 121 to 123 g/km. And the impact of the options will also be significant with the WLTP. Increasing CO2 emissions by five or six percent just by adding a few common options is not unusual. That will have completely surely consequences for the topic options and the associated price politics. Another way to achieve the targets is to consider teaming up with manufacturers who have a portfolio of vehicles with low or no CO2 emissions.

Further relief is possible up to 2023 through “supercredits” for electric vehicles and “eco-innovations”. Furthermore the introduction of zero-emission vehicles with regard to the CO2 limits will also be promoted in subsequent years. However, this will probably not be completely sufficient for any manufacturer. This means that huge investments in existing vehicles and technologies will still be necessary to achieve improvements. Changes can be made for example in aerodynamics, rolling resistance or vehicle weight. This would adapt the product range to sustainability requirements, to achieve emission targets and to convince customers. How the situation will look from 2025 with even stricter limits and what consequences vehicle taxation according to WLTP may have, you will soon be able to read here.

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