Already facing financial challenges under a weak home economy, European automakers may soon have a new challenge to add to the list when the European Union adopts a more accurate method of testing CO2 emissions and fuel economy among their lineups, with EVs becoming the biggest beneficiaries as a result.
Automotive News Europe reports the EU will do away with the New European Drive Cycle test in 2017, adopting the United Nations’ World Light Vehicle Test Procedure for its higher accuracy than the outgoing testing method. Automakers want the WLTP delayed until 2020, citing cost increases for the reason; French bank Exane BNP Paribas estimates automakers would add €1000 ($1,356 USD) per vehicle to help recoup investment costs into adapting to the new testing standards.
The new test, which is designed to better accurately account for modern driving conditions, would push past the NEDC’s 2021 mandate of 95 grams of CO2 per kilometer by as much as 20 percent, NOx emissions also boosted among diesel offerings under the WLTP. Exane analyst Stuart Pearson noted the increased reduction goal would reflect in the industry’s bottom line:
Should the new test cycle lead to emissions say 20 percent above that on NEDC, then assuming a 30 euro per gram cost of CO2 technology, the incremental cost for the EU industry would be around 11 billion euros.
Automakers with margins below that needed to meet compliance — including Fiat, Renault and Peugeot — will struggle more than the well-off German manufacturers, while suppliers who provide parts needed to boost fuel efficiency will be the biggest winners. The standards could also boost sales of hybrids and EVs, while diesels slide in kind.