A real time bomb. On the eve of the opening of the car show favorite fans of big cars “premium”, this Tuesday in Geneva, the question is in every head at the car manufacturers: how to meet the European targets for CO2 emissions in 2021?
Because the deadline is approaching. The sword of Damocles billions of euros of financial penalties becomes more and more concrete. “Manufacturers have been slow to take the measure of the subject, and today the issue is accelerating,” said Markus Collet, a partner in the consulting firm strategy CVA (Corporate Value Associates). “But there is no quick fix, there will be damage! “
Financial penalties
Under a regulation adopted in 2014, car manufacturers will have to meet certain CO2 emission limits for new car sales for the year as of 2021. On average, they should not exceed 95 grams per kilometer – knowing that each manufacturer has been assigned an individual goal based on the weight and footprint of its range. Otherwise, they will have to pay a fine of 95 euros per car and per excess gram.
The subject began to worry seriously the builders several months ago. Dieter Zetsche, the CEO of the Daimler Group, has sounded the alarm several times, especially when he chaired the ACEA (European Automobile Manufacturers’ Association), the association of European manufacturers – where he was replaced this year by the boss of PSA , Carlos Tavares. Just recently, at the Detroit show, he admitted that Daimler and his Mercedes “were not sure of being compliant in 2021”.
Emissions up last year
It must be said that in the past two years, car manufacturers have instead moved away from the target, instead of getting closer to it. Because l a drop in sales of diesel vehicles (which emit between 15% and 20% less than petrol vehicles), just like the SUV craze, these urban 4×4 fuel-hungry (thus more emitters of CO2), reversed the downward trend recorded until- the.
Last year, the average emissions of new cars even increased for the first time in at least two decades. 2017 figures for Europe are not yet known, but this is the case in France (+ 0.9%) in the United Kingdom (+ 0.8%) and Germany (+ 0.7%). In 2016, the European average had dropped to 118 grams, compared to 127 grams in 2013.
Another aggravating factor, the procedure for measuring CO2 emissions is evolving, to move away from laboratory conditions (NEDC protocol) and closer to reality (“WLTP” protocol). “The Commission has adopted a conversion formula, which will be applied in 2021: in our view, this will amount to making the target even more restrictive by around 5%,” says Erik Jonnaert, Secretary General of ACEA.
Investments in the electric
To lower their average, all manufacturers have announced major investments in the electrification of their range – with models that will arrive between 2019 and 2025: 90 billion in total according to a recent calculation of Reuters. Customers will still have to buy these cleaner vehicles, the manufacturers argue – even though delivery times for some electric cars, like the Renault Zoe, are now several months.
“If governments are serious about reducing emissions, they should invest in charging infrastructure,” says Erik Jonnaert. Last year, 100% electric vehicles accounted for 1.4% of the European market and hybrids for 2.9%.
” Gaz factory “
It is difficult at this stage to know where the builders will be in 2021, and what will be the amount of fines to be paid. Most remain unclear on the subject, or ensure that they will achieve their goals. “It’s very complicated to calculate, you have to take each manufacturer, model by model, estimate precisely how sales will evolve … a real gas plant,” notes Gaetan Toulemonde, analyst at Deutsche Bank.
Some firms have tried it, as PA Consulting or MSCI , with different prediction methods for 2021 and therefore significantly different results. One thing is certain: the fines will be for some billions of euros. Their margins, now restored after years of crisis, may take a hit. “They could also reflect the impact on their sales prices,” says Markus Collet. “In one way or another, consumers will pay part of the bill! “.