Typical electric car set-up
Welcome to the EU’s plan to strong-arm its way to victory in the electric car game, in the name of imaginary climate benefits. What happens if the manufacturers all start posting heavy losses due to poor EV sales, as a result of this coercion, is not yet clear. As the article says, tens of billions of euros are at stake.
Long-awaited light-duty vehicle emission rules will hit light-duty vehicle makers working in EU member countries on January 1, and automakers will soon have to deal with the consequences, says OilPrice.com.
Vehicle manufacturers will have to sell many more hybrid and electric vehicles or pay costly fines, a situation similar to China’s rules.
For automakers with product lineups with few EV offerings, they’ll need to sell lots of conventional cars and trucks, and use the profits to pay the fines.
Industry analysts expect plug-in hybrid, battery electric vehicle, and hybrid vehicle sales to soar in the near future.
Earlier this year, the EU approved carbon emissions targets for 2030 that will be 37.5 percent lower than the 2020-21 fleet limit of 95 grams per km. The auto industry had lobbied for a more reasonable reduction target of 20 percent, arguing that they needed more time to prepare and to avoid taking huge financial hits.
Automakers and their supplier partners argued that starting the process over 2020-21 and through the 2030 target will cause a very costly switch over to electrified vehicles in their lineup of new vehicles sold.
Commercial truckmakers will be next. In Europe, heavy-duty trucks will have to emit 30 percent less greenhouse gases by 2030. EU regulators say that about 20 percent of Europe’s carbon dioxide and greenhouse gases come from light-duty vehicles, and heavy-duty trucks add to that emissions share even more.
Shareholders worry that profit will be hurt as these electrified vehicles can’t be sold at higher prices than conventional gasoline and diesel models.
For them, it means they won’t be profitable until battery costs come down; and there are other costly expenses such as installing charging stations and switching over to maintaining these vehicles that the vast majority of consumers and fleets have never experienced.
When the new rules take hold at the start of 2020, automakers must meet strict new exhaust emission rules or face substantial fines. The upper limit is set at 95 grams of carbon dioxide for every kilometer of driving. Going over that limit will mean a fine is given at 95 euros ($106.44) for every gram per kilometer above the limit, multiplied by the total number of cars sold by the manufacturer.
For example, if the new rules had been in place during 2018, automakers would have owed more than 33 billion euros ($36.9 billion).
Full report here.
via Tallbloke’s Talkshop
January 1, 2020 at 01:39PM
Iowa Climate Science Education 