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Why the CO₂ requirements in the EU become a problem for BMW, Daimler and VW

Read the article in German here

PA Consulting is quoted in an article in the German Handelsblatt. The article looks at how the EU is giving car makers more ambitious targets for CO₂ reduction: By 2030, CO₂ emissions are expected to fall by another 35 percent despite the fleet average of CO₂ has recently increased due to SUV boom and decline in diesel sales. As the current fleets show and should the fleet targets of the EU be decided for 2030, as it is currently planned, the article reports, the German manufacturers would have to change their business model drastically.

The average target of 95 grams CO₂/km in 2021 does not apply to every manufacturer as the specific target is based on vehicle weight. Volvo with more heavy vehicles have to meet only a limit of 103.5 grams. For Fiat-Chrysler which sells more small cars there is a limit of 91.1 grams.

Volkswagen have to stretch for achieving the EU goals and avoid billions of penalties. In 2017, their fleet average was 125 grams of CO₂ – well above the 96.3-gram target that VW will have to meet by 2021. Now the group is investing 34 billion euros in 50 new electrified models available from 2019 onwards. However, according to experts of PA Consulting, VW would have to sell 400,000 electric cars in Europe to achieve the goals. So far PA estimate that VW will miss their target in 2021 by 2.8 grams and would face a fine of around 1.2 billion euros.

BMW looks even worse. The fleet average recently stagnated at 127.4 grams CO₂ – although they were among the first offering their own electric car with the i3, already having sold over 100,000 electric cars globally. By 2020, however, hardly any new electric models will be added. By 2021, BMW would have to sell about 150,000 electric cars in Europe alone. PA expect BMW to exceed their target of 100.3 grams in 2021 by 3.7 grams, amounting to a fine of 500 million euros.

The SUV boom has brought Daimler record profits and high sales – but recently increased their fleet average by 1.6 grams to 133.5 grams CO₂. Their target of 100.7 grams to meet by 2021 seems far away – 130,000 electric or semi-electric vehicles a year would be needed to achieve the goal. PA assume that Daimler will land about 1.4 grams above the target, with a fine of 200 million euros.

Toyota were the industry leader in 2017 with CO₂ emissions of 105.9 grams per kilometer, without fear regarding their goal for 2021. According to PA they should fall below the specific target of 94.3 grams even by 11 grams. Renault-Nissan-Mitsubishi has at least until 2021 no problem to meet the requirements of the EU. Although they were set with 92.1 grams, the strictest target for 2021, they should fall below this target by 4.6 grams, estimate the PA Consulting experts. With the Renault Zoe and the Nissan Leaf, the group already sells two of the most successful electric cars in the world today.

Volvo currently emits 129.9 grams of CO₂ due to a high proportion of SUVs in their fleet. PA assume that they will significantly undercut the EU target of 103.5 grams, mainly due to a radical electrification. The diesel engine is officially buried by Volvo. As early as 2019, each series will be offered in an electric or semi-electric version. Overall, PA experts estimate that in 2021 they will land 13.4 grams below the requirements of the EU.

Driving into a low emissions future – looking beyond 2021

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