New EU emission rules turn SUVs from “climate killers into profit killers” – report
The SUV (sport utility vehicle) boom cheered on by German carmakers BMW, Daimler and VW is about to turn into a heavy liability for the industry as EU fines for excessive emissions loom from 2020, reports a team of seven journalists in the business daily Handelsblatt. "BMW, Daimler and Volkswagen risk fines worth billions if they don't rapidly change their model offerings," according to the article entitled "The SUV madness – High profits, disastrous environmental impact." The article says that SUVs currently translate into handsome profits for the industry. "But in the medium term, they are headed into a dead end […] the climate killers turn into profit killers." Top range SUV models could trigger fines in excess of 10,000 euros for each vehicle sold from next year, according to the article.
Industry analyst Arndt Ellinghorst from investment advisory Evercore told the newspaper some companies will likely have to set aside provisions to the tune of billions of euros for the fines. He added some carmakers could even be forced to throttle or stop the production of heavy cars like SUVs in order to stay within the new emission limits.
Despite growing concern about climate change following a string of heat waves and droughts, as well as the Fridays for Future student protests, SUV sales go from strength to strength in energy transition home country Germany. New SUV registrations rose more than 20 percent last year. Around one in three new cars registered in Germany is an SUV. At the Frankfurt Motor Show starting next week, climate protesters will take aim at the carmakers' strategy to bet heavily on SUVs in order to finance tomorrow's clean alternatives.