This year a strict new EU directive will compel car makers to cut the average emissions for 95 per cent of their fleet to less than 95g/km of CO2 for 2020 – or face hefty fines. And these targets will continue to tighten in years to come. The plan has been knocking about for several years, giving car makers plenty of opportunity to get their relative houses in order and avoid the huge financial implications in place. You can read our opinion piece on the subject here.
Now, due to the impact of the COVID-19 outbreak, there has been increasing support from some quarters for a relaxation of the schedule for the new emissions targets. A letter sent to the EU Commission and co-signed by four lobby groups, including VDA (the German Association of the Auto Industry), ACEA (which is headed up by Fiat-Chrysler CEO Mike Manley), states that as, “no production, development, testing or homologation work occurs for the time being, we believe that some adjustment would need to be made to the timing of these laws”.
As well as asking for a conversation around the timings of the new laws, it suggests that extra conditions on top of the 37 billion euro stimulus package to combat the impact of coronavirus need to be considered. It doesn't go so far as to criticise the new laws, however, stating the group's underlying support: “We assure you that we do not wish to call into question the laws as such, nor the underlying objectives of road safety, climate protection and environmental protection.”
Obviously, this seems extremely backward on the face of it, albeit the industry does need to look at protecting jobs. However, in the long-term an immediate relaxation of emissions legislation could be counter-productive. Non-governmental organisation, Transport & Environment, pointed out that if long-term sustainability is affected, the European auto industry could lose competitiveness against counterparts from other parts of the world – notably China.
In fact, China is already on a significant EV-buying rebound, with pre-virus sales expected to be achieved by the end of April, according to market research firm, Ipsos. This is expected to be further bolstered with the launch of a domestically-produced Tesla Model 3 in June, and with production ramping up for VW ID. models at its SAIC Volkswagen plant.
For Europe to be debating a relaxation of emissions targets rather than stimulating EV production – as in China – is short-sighted, according to Julia Polsiscanova, Clean Vehicle Director at Transport & Environment: “Any incentives to boost demand once normal life resumes should be targeted at zero-emissions cars. This will help keep jobs in Europe, curb pollution and boost the competitiveness of our car industry.”
Daimler, BMW and Volkswagen have pushed back against the lobby groups and reiterated that they remain committed to the current plan for CO2 targets. CEO of VW Group, Herbert Diess, said: “We have adapted ourselves to meet the 2020 targets, we are committed and from our perspective, we will not call for an extension of the targets.”
In fact, Volkswagen is pushing ahead with production of its ID.3, despite both the COVID-19 pandemic and its own internal battles with the car's software. Its Zwickau plant is due to whir back into life on Monday April 20, a week ahead of the scheduled restart of group's other plants around the globe. In order to facilitate this restart, VW has put into place a 100-point plan to minimise the risks of its workforce being affected by coronavirus when they go back to work.
Bernd Osterloh, Chairman of the Works Council, said: “With about 100 measures, we are keeping the risk of infection at Volkswagen as low as possible. This will set a standard for the industry.”
VW is, however, admitting that the emissions targets are going to be harder to hit thanks to the impact of COVID-19 and we can be pretty confident that one of the reasons it is restarting ID.3 production as early as possible is because VW knows it's facing huge fines already and cannot afford to slip any further. It has also withdrawn its full-year 2020 outlook which was published with its 2019 Annual Report as it has admitted that not only can it not achieve it, the impacts of the coronavirus cannot be accurately forecast.
The uncertainty that COVID-19 has caused has put the automotive industry in a really difficult spot, and they need to do everything they can to ensure they retain jobs and minimise the impact on their suppliers. That should not, however, come at the expense of the environment or, indeed, progress. If we're being cynical, it's fairly clear that some of the brands associated with the push to relax the CO2 targets are simply trying to buy themselves time. The EU Commission has stated that it will not be contemplating a change to its policy, and it's encouraging that not only are big brands, like VW, are not only pushing back as well, they are cracking on with EV production as soon as they possibly can.
Of course, if we put our cynical hat back on, VW is almost certainly being compelled to get the ID.3 off the line as quickly as possible to minimise the fines it's facing for breaching the 95g/km target...
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