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Driving into a low emissions future

Minds have been increasingly focused on the European Union 2021 CO₂ emissions targets. According to our latest analysis, some car makers have got their strategy right and will meet their targets easily, but others have woken up too late and will struggle. While many of these late risers have plans for new low emission models, it will be hard for them to implement their plans fast enough to make a real difference.

Those companies at risk of missing their targets will need to prioritise the selling, marketing and pricing of low emission vehicles. Moving from internal combustion engines to new powertrain technologies will require different technical and commercial approaches. It will be an expensive and complex transformation. But innovative technology, not least in batteries, is developing fast. With the right strategy, manufacturers can come out winners.

This is the fourth year we've assessed car makers’ performance against the 2021 emissions reduction targets. This year’s rankings predict eight of the thirteen car makers are likely to miss their targets, though some are getting closer by accelerating their efforts. In reality, given the short time until the 2021 deadline and the lead-time needed to implement technical changes, there’s little the late risers can do in time.

This year's rankings - time is running out

Toyota is at the top of the table, followed by Renault-Nissan-Mitsubishi and Volvo. However, eight of the thirteen manufacturers will miss their targets, although Daimler and BMW have improved their performance and are getting closer to complying. Some companies are likely to face significant fines. Volkswagen faces a potential penalty of 1.4 billion euros (10 per cent of its earnings 2017), reflecting the high number of cars it sells in Europe. Peugeot-Citroen (including Opel/Vauxhall) could see fines of 600 million euros, amounting to 20 per cent of its earnings in 2017, and Ford and Fiat Chrysler could see penalties of 10 per cent of their earnings in 2017.

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

Rank Car maker 2021 Target 2021 Prediction
1 Toyota 95.1 87.1
2 Renault-Nissan-Mitsubishi 94.8 92.1
3 Volvo 106.7 93.7
4 Honda 96.6 95.5
5 PSA 93 95.6
6 Hyundai-Kia 94 96.1
7 Mazda 94.9 98.1
8 Fiat-Chrysler (FCA) 91.8 98.5
9 Ford 95.4 99.8
10 Volkswagen 97.7 101.5
11 BMW 102.4 104.4
12 Daimler 102.8 104.6
13 Jaguar-Land-Rover 130.6 130.1

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.

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Our unique method of benchmarking examines manufacturers’ performance against their specific targets, forecasting the gap they will need to close by 2021. We arrive at our forecasts by assessing each car maker’s ability to reduce average emissions through a range of initiatives. We also forecast the registrations for each type of car (diesel, petrol, hybrids and battery electric) to determine the sales portfolio of lower emission vehicles. And we looked at sales by vehicle segment. Based on this data we develop our forecasts of average CO₂ (g/km) emissions in 2021.


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what car makers can do - the next three years

Our results show that it’s too late for changes in technology to make a difference to manufacturers’ abiity to meet the 2021 targets. However, they're undoubtedly making progress on electrification in time. They're developing many new models and a range of low emission technologies have real potential to reduce CO₂ emissions further. The challenge for car makers is how quickly they can apply these on the road and sell them.

Sales

Steering sales volumes by CO₂ emissions

Sales steering needs to set up new processes to get sales data from car dealers all over Europe as fast as possible, so manufacturers can adapt sales goals and production capacities quickly.

Marketing

Pushing electrified cars (PHEVs and BEVs)

Marketing must react quickly to adapt the commercial strategy to the needs of car makers. That means ensuring they reach their sales targets without exceeding them.

Pricing

Adapting price strategies and incentives

Adapting price strategies and incentives might be the best way to push electrified cars and reduce the gap to the CO₂ target. But to avoid substantial effects on profits, targets must not be exceeded.

 

Car makers must focus on sales, marketing and price. Only by increasing sales of low emission vehicles can they move towards their targets and reduce fines. That means understanding sales volumes by CO₂ emissions, heavily marketing hybrids and fully electrified vehicles, and responding to the question of price. When it comes to electric vehicles, it will take until 2028 for them to beat the cost of conventional petrol ones, so manufacturers may need to take a profit hit to generate enough sales to make a difference.
 

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To find out more about how to prepare for the low emissions future, get in touch with our expert.

Michael Schweikl

PA automotive expert

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