New EU CO2 limits on cars risk triggering an invasion of fake ‘electric’ vehicles – report

On the day the European Parliament rubber-stamps stricter CO2 limits for new cars and vans, Transport & Environment (T&E) warns that carmakers can exploit loopholes in the regulation to push sales of fake plug-in cars over electric vehicles (EVs) with no tailpipe emissions. As the rules on crediting EV sales leave room for gaming, carmakers can supply half of all ´zero and low-emission´ cars needed to comply with stricter CO2 limits with fake ‘electric’ cars.

EV shared car Germany

Currently plug-in hybrids are often big SUVs which are rarely charged because of their very limited electric range, and they emit as much or more CO2 as diesel or petrol cars do on the road [1]. By allowing fake ‘electric’ cars to count towards the EV targets, it has become much easier for carmakers to earn the generous CO2 bonuses [2] that result from over-shooting these targets. T&E’s analysis shows that carmakers can meet the new rules by selling almost 1.7 million ‘fake’ electric cars every year from 2025 and almost 4 million in 2030.

National governments can prevent the rise of fake ‘electric’ cars by promoting only electric, fuel cell and proper plug-in hybrids. Germany’s finance minister recently suggested plug-in hybrids should have a minimum range of 80km. This is not the regulation’s only weakness: previously T&E exposed how carmakers are manipulating the 2021 baseline for the new standards by inflating the CO2 values of cars approved in the new WLTP test.

Julia Poliscanova, clean vehicles manager, said: “Europe’s CO2 limits for cars could be a breakthrough for e-mobility, but regulators still have a lot of work to do. National governments should limit incentives to zero-emission and long range plug-in hybrid cars only. Otherwise carmakers may go down the road of least resistance and comply with fake ‘electric’ cars that never get charged and spew out as much CO2 as SUVs. Similarly, if the Commission doesn’t stop the baseline cheating the climate benefits of this regulation will be greatly reduced.”

Moreover, carmakers can register electric cars in 14 European markets to benefit from double-counting credits, only to resell the same cars in more mature markets for EVs shortly afterwards. For instance, a carmaker can register 100,000 new EVs in Warsaw, claim the inflated CO2 credits so it can keep selling fossil-powered SUVs, and then resell the EVs as new to customers in Berlin the following month. This loophole would result in CO2 reductions in carmakers’ fleets being recorded but fewer EVs and more CO2 emissions on the road.

Julia Poliscanova said: “This incentive was supposed to kickstart the electric car market in countries with almost no EV sales. The problem is that the rules were poorly designed and there will be a huge temptation for carmakers to game the system. The Commission can fix this by monitoring electric car registrations every year and cancelling the EV sales credits where gaming of the double-counting provisions is found. At the same time governments should make sure incentives are limited to vehicles that are actually driven on their roads.”

Last year the European Parliament and EU heads of state agreed to reduce emissions from new cars and vans by 15% in 2025 and 37.5% in 2030 based on 2021 levels. However, selling more EVs than the voluntary sales targets [3] allows carmakers to bring the CO2 reduction targets down to 10.8% in 2025 and 34.4% in 2030.

Transport is Europe’s biggest climate problem. Cars and vans represent almost two-thirds of all transport emissions in the EU. Achieving the targets of the Paris international climate accord requires the last new car in Europe with an engine to be sold by the early 2030s.

 

Footnotes: 

[1] These cars are built to achieve compliance at the minimum cost, rather than drive real-world emissions down via improved plug-in technology. These often have CO2 emissions above 100g/km on the road and were not initially supposed to count towards the incentives, but were included at the behest of car manufacturing countries during the final negotiations.

[2] Carmakers that sell more than 15/35% zero and low-emission vehicles in 2025/2030 can reduce their CO2 reduction targets by up to 5%.

[3] Each EV sale in Poland counts as 1.85 EVs sold.


Contact the press team

Nico Muzi
Communications Director
+32 (0)484 27 87 91 
nico.muzi@transportenvironment.org

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