Carmaker fuel efficiency cost claims misleading

The average car sold in Europe last year was 4% more fuel efficient, emitted 4% less CO2 and was 2.5% cheaper in real terms than a year earlier, according to a new report. The new figures, which continue recent trends, severely undermine industry claims that legally-binding fuel efficiency targets would make cars ‘unaffordable’.

The report, published today by Transport & Environment, shows that CO2 emissions from the average new car sold in Europe last year dropped to the milestone figure of 140g CO2/km. However like-for-like retail prices have not increased dramatically since legally-binding CO2 targets were introduced, as the car industry predicted; but have actually fallen every year in real terms.

Studies based on industry cost estimates for reaching the 140g CO2/km milestone consistently claimed that retail prices would significantly increase as a result.

The T&E report examined two cost estimates carried out for the European Commission in 2001 and 2006 that were based on data supplied by the car industry. The earlier report predicted that reaching 140g/km would cause the retail price of the average new car to increase by €2400, the later study said €1200 (1). But in contrast like-for-like retail prices actually fell across Europe by 2.4% a year, on average, since legally binding targets for car CO2 were first announced in 2007.

Jos Dings, director of Transport & Environment said:
“The car industry has consistently resisted fuel efficiency regulations by complaining that cars would become ‘unaffordable’. But car emissions have now dropped to 140g CO2/km and that simply hasn’t happened; prices have actually fallen in real terms.”

“Clearly the EU needs to learn lessons from this. When it comes to future targets to improve fuel efficiency, industry cost estimates should be taken with an SUV-sized pinch of salt.”

The T&E report, which examines the performance of major carmakers in cutting CO2, found that Volvo delivered the largest cuts in CO2 on average in 2010 (9%). In contrast, average emissions of new Honda and Mazda cars actually increased (2). Daimler has the worst average CO2 emissions of major carmakers in Europe, followed by Volvo.

Fiat, Toyota and Peugeot-Citroen have Europe’s cleanest fleets in terms of CO2.

Europe’s largest car market, Germany, made the second-worst progress in cutting CO2 emissions from new cars last year, with a cut of just 1.8% averaged across sales of 2.8 million vehicles. Germany’s poor performance is unlikely to be helped by a new car co2 label agreed by Berlin in July which puts small efficient models such as the Smart and Fiat Panda in the ‘D’ category, while the Audi Q7, a large SUV, gets a green ‘B’ rating.

Slovakia was the EU country showing the least progress with the average new car sold emitting 1.3% higher CO2 emissions than in 2009. On the contrary, Denmark made an impressive 8.9% year-on-year reduction.

Download the full report here.

1. The large difference between the cost estimates is due to the different baselines used. The higher figure is for a cut in CO2 of 25%, the lower for a cut of 16%. Both studies therefore estimate the cost of cutting CO2 emissions to 140g CO2/km at roughly around €100 per percentage reduction.

2. Honda’s emissions increased by 0.6%, Mazda by 0.3%

- Car fuel consumption and CO2 emissions are directly linked. Burning a litre of petrol results in around 2340 g/CO2 being emitted. Diesel contains more energy and carbon per litre so results in around 2620 g/CO2.

- The car retail price index source is the European Commission. Prices are calculated based on a like-for-like basis, so shifts in fleet mix caused by consumers shifting to smaller cars as a result of scrappage schemes etc. do not affect the results. See the full report for further details.

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Nico Muzi
Communications Director
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