The dossier is already poisoning the day-to-day lives of European carmakers … and risks weighing on their production and margins this year. Carlos Ghosn himself issued a warning by commenting on the publication of Renault results in February : “There is a lot of uncertainty, we do not know at what rate authorizations will be given, or if consumers will be willing to pay …” he said, to justify his caution on the exercise in course.
The CEO Renault was referring to a technical issue that is fraught with stakes: the new European regulation on the approval of new vehicles, which will come into force in September 2018 (it has already been in place for new models since September 2017).
From that date, the fuel consumption of all the cars put on sale, as well as their emissions (CO2, Nox, fine particles, etc.), will have to be measured according to a new regulation, called WLTP, and closer to the reality than the old NEDC cycle. “It takes the engine more, has less idle time, for example, and it also has a road test,” says Gaetan Monnier, IFP Energies Nouvelles expert.
Cost and time
In short, a more complex and more restrictive procedure (see also infographic), which turns into the puzzle for builders. “Not only are the new tests longer, but we also need to quantify the emissions related to the car’s equipment: roof racks, additional rows of seats … A real gas plant! Says one of them, for example. What increase the costs and timing of approval. “Some of our members have sounded the alarm about the extra costs, very significant,” said Thierry Archambault, president delegate of the International Chamber of Automobile and Motorcycle (CSIAM). At BMW, the cost of switching to WLTP will be 150 million euros.
Several manufacturers also alerted about the risk of congestion in certification bodies. “We have to re-register all the vehicles, it’s a real challenge. There is a bottleneck, “said Daimler boss Dieter Zetsche at the Geneva Motor Show. In France, Utac Ceram has doubled its dedicated teams. “Every change in pollution standard causes a spike in activity, but it is particularly tense. Administrative management, in particular, is much heavier, “acknowledges Céline Vallaude, Regulatory Officer at Utac. PSA has even anticipated some approvals to address this increase in workload.
20% difference
Most importantly, the new tests will lead to significantly higher figures, especially on consumption or CO2 emissions. “We estimate the differential at around 20% on average,” says Vijay Subramanian, an analyst at IHS Markit. The difference of course depends on the vehicles, and their engine. Jato Dynamics, which released a study on the subject in November, for example has found a higher CO2 level of 18% on the BMW X6M50D, and 14% on the Peugeot 308 Active SW.
This change of display is far from being neutral, because the CO2 emissions are used as a basis for calculating the auto malus, or the objectives set by Brussels by 2021 . However, the current grids have been established according to the NEDC standard, and the way they will be adapted is not yet very clear. “According to our estimates, the transition will make the European target more binding by 5%,” says the ACEA (European Automobile Manufacturers’ Association), the body that represents builders in Brussels.
Adaptation of engines
In the meantime, manufacturers are adapting their fleets or engines so that their rates do not skyrocket. “Some suppress small supercharged engines,” says Gaetan Monnier. “This transition will increase the cost of engine development,” said Thierry Bolloré, Renault’s Chief Operating Officer. “It’s not a long calm river, the engineers are energized,” he insisted.