CHRISTIAAN HETZNER

Europe's automakers score a win with new CO2 targets

Christiaan Hetzner is Automotive News Europe's Germany correspondent.Christiaan Hetzner is Automotive News Europe's Germany correspondent.
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Outwardly Europe's carmakers are complaining stridently about the EU Commission's proposed fleet emission targets through the next decade. Behind closed doors however it's a good bet that they are breaking out the champagne. They shouldn't, since it would be short sighted mistake to view this as a victory.

As the EU Single Markets Commissioner Elzbieta Bienkowska, the most vociferous practitioner in Brussels of hard love for automakers, pointedly said in September: "It sometimes seems to me that we have to save this industry from itself."

But the 15 percent relative cut by 2025 sounds anything but challenging. As a comparison, the comparable five-year cut between 2015 and 2020 is close to 20 percent. The proposed 30 percent cut by 2030 actually looks downright laughable – that would be some 67 grams under today's methodology.

Just as a reminder there are European cities, states and even countries debating today whether to ban combustion engines by then. In several years there may not even be a discussion on the subject as social acceptance for ICEs will dwindle once EVs and plug-ins offer lower prices, longer ranges and quicker recharging times.

Business textbooks would say that tipping point is at around 16 percent market penetration, and that also happens to coincide with German automaker forecasts for the low end of their electrified sales forecast by the middle of the next decade.

Even more appalling, carmakers whose shares of low-emission vehicles that exceed 15 percent in 2025 "will be rewarded in the form of a less strict CO2 target," and EVs will count more than plug-ins. Challenging for 2020, yes, but not when it comes to 2025. Not to mention the obvious question, what kind of incentive is that anyway? It's a lazy and misguided attempt at trying to appease environmental advocates calling for quotas.

Indeed, the emission-scandal prone German car industry missed a golden opportunity to get out ahead of the curve and be the first to embrace stricter targets. After all, they have no choice but to embrace electric vehicles wholeheartedly since each brand, with the exception of landlocked Opel, counts China as its largest market.

This actually grants them a competitive advantage since they can achieve scale effects much faster thanks to the new zero-emission vehicle quotas put in place in China. For Volkswagen brand CEO Herbert Diess, China is the key to his entire EV strategy, estimating 60 percent of his battery-powered ID cars would be sold there come 2025, versus only about 20 percent for Europe.

Other European carmakers that don't sell in big numbers to China would struggle to achieve the same total volumes off one EV platform purely by relying on Europe and the U.S.

Instead the German lobby chose to complain about the "extreme challenges" – no doubt partly to shield its two biggest allies on the Commission from criticism: Vice-President Maros Sefcovic and Miguel Arias Canete, a former oil industry entrepreneur ironically in charge of Climate Action.

"Whether these CO2 targets can be reached is more than questionable from today's perspective," said VDA President Matthias Wissmann, lobbyist-in-chief for the German industry. Don't believe him.

You can reach Christiaan Hetzner at christiaan.hetzner@gmail.com.

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