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CO2 battle, odds stacked against carmakers
Peter Schmidt | Editor

Published: Fri, 04th December 2015 15:05:12 GMT

Nissan Leaf Renault Zoe Paris global environment summit 2015

Open quote signUN talks in Paris, aimed to negotiate and agree a legally binding global accord to slow climate change, will be watched closely by senior thinkers in most industries. 

Whatever the outcome of the Paris talks, for the auto-industry at least, short to medium term CO2 goals are already cast in stone for the majority of main global markets. 

While the autoindustry’s own crystal-ball gazers are concerned primarily with likely trends and developments beyond 2025, those charged with the development of strategies suited to the decade ahead, are confronted by a potential problem of nightmarish proportions: A no-win scenario. 

Not so long ago the autoindustry faced an altogether different problem. 

The sky-high cost of fuel. 

That was accompanied by the then widely accepted belief that future fuel costs were destined to climb to higher and higher levels. 

In consequence, across the board downsizing, mainly smaller and lighter cars powered by pocket-size engines were seen as the silver bullet for both improved fuel economy and emissions reductions.

Fast forward, and to an extent, today’s auto-industry problem is the low cost of fuel. 

In consequence, new car buyers in say the US and Europe, encouraged by today’s low pump prices, have dumped all earlier intentions of running a small fuel-economical car. 

Instead, whichever way latest vehicle sales numbers are looked at, today’s new car buyers have rediscovered their appetite for larger and generally more thirsty vehicles. 

In consequence, many of the small fuel-sippers designed at great expense during the recent high fuel price era have now been relegated to little more than wallflower status. 

Fact is, larger, heavier and generally less fuel-economical SUV-Crossovers have evolved the world over as the latest vehicles to be seen in. 

Sales of such vehicles, not just in the US, but no less so in China and high-fuel price Europe, are braking one sales record after another. 

Now, these trends have created something of a dilemma for the unfortunate autoindustry.

Extremely tough CO2 fleet average limits, brought to life during the high-price fuel era, are universally binding. In today’s cheap fuel era, few, if any signs of a fundamental change in the foreseeable future, the public at large is evidently not sufficiently interested in today’s low CO2 emitting cars. 

A view underlined by today’s 0.64 per cent electric car sales share in Western Europe. 

Now, that’s with high purchase incentives in a great many markets. 

By contrast, SUV Crossovers already took a record 23 per cent of this year’s West European car market. 

Underlying trend? 


What does it mean for the carmakers? 

The autoindustry can only succeed if it builds cars that people want to buy. 

And therein lies the rub. 

Put simply, the car sales mix needed by the industry to achieve the tough CO2 limits set in stone by the EU is simply not materialising. 

If anything, the exact opposite appears to be the case. 

As things stand today, you can’t but sympathise with the carmakers. 

Barring legislation with teeth to greatly penalise the purchase of comparatively high CO2-emitting vehicles, plus a more rigorous system to double check real-world, rather than academic laboratory generated CO2 levels for the cars on sale, for carmakers with a forever growing share of SUV-Crossovers, there is precious little chance to make the 95g/km levels before the end of this decade. 

The paradox, in summary is that the industry faces tough EU CO2 limits on the one hand, while on the other hand consumers are flocking in droves for higher emitting cars because of comparatively cheap fuel. 

No two ways about it, a no win scenario for the industry
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