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The CO₂ emissions challenge

Some carmakers are running late in the race to 2021

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Facing disruption from new technologies and regulation, the European automotive industry invests more than €50 billion into R&D annually (according to ACEA), a large percentage of which is on fuel-efficiency technology. This reflects the need to meet the European Union’s (EU) emission reduction targets for new cars. These require that, by 2021, new car fleets do not emit more than an average of 95 grams of CO₂ per kilometre (g/km).

Every year, we rank the top carmakers in Europe according to their performance against these CO₂ emission targets. Our latest rankings show many are still struggling to hit their 2021 targets raising real questions about how they can make the changes required in time to avoid costly penalties.

While Volvo, Toyota, Renault-Nissan and Jaguar Land Rover are on track to meet their specific targets by 2021, six major manufacturers – Volkswagen, BMW, Hyundai-Kia, Fiat Chrysler, Peugeot-Citroen and Ford – are likely to miss theirs. And Daimler might be close to benefit from further progress.

Our way of benchmarking, unavailable anywhere else in the market, analyses the targets set for each carmakers’ business based on their average vehicle weight and compares this with their forecasted performance based on their overall fleet portfolio.

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To see which carmakers are on track to meet their 2021 targets, and how their levels of CO₂ emissions compare, click on the interactive dashboard below.

Ranking per average Co2 (g/km) emission 2021:

Rank Carmaker 2021 Prediction 2021 Target
1 Volvo 73.1 103.5
2 Toyota 83.5 94.3
3 Renault-Nissan 91.4 92.1
4 Hyundai-Kia 94.9 91.7
5 PSA (Peugeot Citroen) + Opel 95.6 92.6
6 Ford 96.1 93
7 Volkswagen 100.3 96.3
8 FCA (Fiat Chrysler) 101.2 91.1
9 Daimler 102.1 100.7
10 BMW 104.7 100.3
11 JLR (Jaguar Land Rover) 130.9 132

Please visit this web page on a desktop computer or tablet device to view the above table as an interactive dashboard.

How carmakers rank against their competitors for CO2 emissions. Forecast by PA Consulting Group is based on pre-2014 figures from Transport & Environment, ICCT, JLR Sustainability Report, ACEA and PwC Autofacts.

On target Closed to target Off target

Analysis of the results

Individual CO₂ targets are achievable for a few carmakers; only four are forecast to meet the targets. Toyota and Volvo, for example, could be even more than 10-20g CO₂/km ahead of target, while Renault-Nissan will be 0.7g CO₂/km ahead of the 2021 target. JLR’s targets require a 45% reduction on their 2007 emissions as long as they do not exceed 300,000 vehicles sold per year in Europe. They turn from amber to green for the first time, now achieving their specific target based on good progress for CO₂ performance in their fleet portfolio.

Just one carmaker is getting closer to its specific target. Daimler may be able to turn round their performance. They have announced investment plans to reduce emissions levels – so far facing a small gap of 1.4g CO₂/km to their target of 100.7g CO₂/km. They have already launched electric and hybrid cars and are well on the way to the electrification of their fleet. This is based on a total of 50 new models by 2022, and they are planning to increase their BEV sales to a share of 15% to 25% by the year 2025.

Two German carmakers – Volkswagen and BMW – as well as Hyundai-Kia, Peugeot-Citroen, Fiat Chrysler and Ford are likely to miss their targets. Many of their alternative vehicles will not reach the market in time to make an effect on emission levels before 2021. They risk penalties of €95 for each gram of CO₂ above the limit, multiplied by the number of cars they sell in 2020. On current performance, the fines can reach or rise above the €1bn mark for some carmakers.

How can carmakers meet 2021 co₂ emission targets?

Our analysis shows all carmakers face a number of particular challenges if they are to make progress towards meeting the targets.

  • The popularity of SUVs: Increasing sales of SUVs are making it harder for a number of manufacturers to reduce emissions. At the same time, sales of electric vehicles remain very low, and a full range of models is not expected to be available until 2020, limiting the choice available to consumers.
  • Diesel in decline: Traditionally, diesel engines represented an essential part of carmakers‘ strategies in Europe to reduce CO₂ emissions, given their better CO₂ performance than petrol cars due to lower fuel consumption. This strategy is at risk now, given the scrutiny of their higher emissions of nitrogen oxide (NOx).
  • Developing alternatives: Carmakers focus on the introduction of mild hybrid vehicles where an electric motor supports the traditional internal combustion engine. However, the focus will need to move on developing fully electric vehicles. Some carmakers also intensify the development of alternative technologies such as compressed natural gas, LPG and fuel cells.
  • Getting the price right: Most carmakers are planning for price parity between conventional vehicles and electric vehicles from 2020 onwards. The cost driver for the manufacture of electric vehicles is the battery but more mature battery technology and higher volumes will drive down costs in the period to 2025.

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