Emission rules make electric-car makers on the verge of profitability

Technology fridolin niyonsaba 2018-10-02 13:16:22 88 0

Electric cars are poised to arrive en masse in European showrooms after years of hyped concept-car launches and billions in investment by automakers and suppliers.

Now comes the hard part: selling them at a profit.

Battery models making their car-show debut in Paris this week, from PSA Group's electric DS3 Crossback to the Mercedes EQC, will erode profitability as they struggle to stay in the black, executives generally acknowledge.

But concerns are mounting that the impact could be worse, as consumers resist paying more for electrified vehicles - forcing carmakers to sell them at a bigger loss to meet emissions goals.

A Sept. 25 profit warning by BMW, blamed in part on electrification costs and tightening emissions rules, was "a first alarm signal", Tavares said in a weekend radio interview.

"Either we accept paying more for clean mobility, or we put the European auto industry in jeopardy."

The European Parliament voted on plans to cut carbon dioxide car emissions by as much as 45 percent by 2030 from an average 95 grams per kilometer in 2021 - a goal many automakers are already in danger of missing, on pain of fines running to hundreds of millions of euros.

Jaguar Classic has confirmed it will offer all-electric E-types for sale. /VCG Photo

Priced to push

After declining for a decade, new-vehicle carbon emissions are rising again as customers flock from cars to SUVs, and from diesel to gasoline engines. Diesel emits more nitrogen oxides and particulates, but less CO2.

Volkswagen has said the ID hatchback, due to open the brand's electric onslaught next year, will be priced close to conventionally powered versions of the Golf compact.

"VW is about to launch a load of electric vehicles at the same price as gasoline, and therefore at a loss," said Laurent Petizon, a managing director at consulting firm AlixPartners.

Volkswagen and Mercedes parent Daimler, which between them have announced 30 billion euros ($35 billion) in electrification investment, both warned last month that it would not be enough.

They and other carmakers are also mandated to sell more electric cars in China and a group of US states led by California. More than 200 electric and plug-in model launches are already scheduled globally over the next three years.

Source(s): Reuters

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