Manufacturers in the spotlight after the new EU emissions regulations

Climate change has become the main threat to the future of humanity and the greatest environmental, ecological and social challenge. Global awareness and commitment is essential to curb emissions and make fully effective the Paris Agreement, the first global pact against global warming and which was reached at the 2015 climate summit in the French capital.

The pact, which marks the roadmap for the coming decades and signed by 195 countries, lays the foundations for, for the first time, to establish a global action plan to reduce greenhouse gas emissions and which aims to limit global warming well below 2ºC.

Aware of the great climate impact that fossil fuels have on the Earth, in recent years large companies in the motor industry and administrations have promoted new forms of mobility that aim to reduce emissions and end dependence on non-renewable resources. The electrification of vehicles and the traffic restrictions that some cities have implemented are the central focus of this paradigm shift.

But if change is to be effective, other, more direct measures are necessary. As of January 1, 2020, the new EU regulations on pollutant emissions become effective. The new legislation aims to reduce the average emissions produced by each manufacturer. The limit that will be imposed on manufacturers is that the average emissions of the vehicles sold by the brands in 2020 must not exceed 95 grams of carbon dioxide (CO2) per kilometer. Above that data, manufacturers will have to pay 95 euros for each gram of excess and car, which could lead to millionaire fines.

The data

Manufacturers will have to pay 95 euros for each gram of excess and car

According to Europapress, data from the MSI consultancy for Sumauto indicate that the new regulations will cause an increase in electric vehicle registrations of 14.2% in the coming year. For this reason, “they will promote the commercialization of electric models, since those sold in 2020 with emissions below 50 g / km of CO2 will be equivalent to two sales, a measure that will allow them to adapt to this regulation,” says Sumauto.

The emission reduction does not apply to each of the vehicles produced but is an average that will take into account all registrations. In order for manufacturers to make the transition more smoothly, the regulations will grant additional benefits to those brands that sell models with emissions of less than 50 grams of CO2 per kilometer, something that only 100% electric models and most plug-in hybrids comply with.

Those manufacturers that incorporate in their vehicles features that have the objective of reducing CO2 emissions will also enjoy benefits and the limits will be extended for those firms that have sales of less than 300,000 units per year in Europe.

A report prepared by the rating agency Moody’s indicates that among the car companies that will experience a minor impact in fines for this situation are Toyota and Volvo Cars. On the opposite side, Volkswagen, Fiat Chrysler, Daimler and Ford, in order, would position themselves as the companies most exposed to sanctions.

The data

Volkswagen, Fiat Chrysler, Daimler and Ford, in order, would position themselves as the companies most exposed to sanctions.

In this context, it would not be surprising that from the second half of 2020 there is a strong concentration of self-registered electric models, which would cause dealers to increase the stock of kilometer zero and, in parallel, a decrease in their prices, thus positioning themselves as a more affordable purchase alternative for individuals.

Sumauto recalls that, although the average cost of an electric vehicle is around 40,000 euros, that is, the equivalent of a premium vehicle, the first electric vehicles that are reaching the second-hand market are marketed at half the price, about 22,600 euros, with an average age that does not reach four years in 72% of cases.

Source: The Vanguard