Europe has introduced a new Company Average Fuel Economy (CAFE) standard of 95gr CO2/km. This regulation comes with harsh fines. The fine, per car sold, is €95 gr/km for each gram over 95 gr/km when the fleet average is over 95 gr/km.
Simple example: the current average in the EU is about 120gr/km, 25gr/km over the target. That implies a fine of 25 x €95, which is €2,375 per car sold. There are some small mitigating refinements that we can ignore.
The top management of Honda in Japan has told their European organization that Honda is not going to pay any fines, according to a Honda press representative I spoke to this week. They will fight it any way possible. Honda is not a large brand in Europe, with less than 1% market share. Brussels will not be very impressed by the opinion of Honda.
With lobbying and a route through the courts unlikely to be successful, it seems the European Honda organizations have to do it themselves. The only viable option is to comply with the regulations.
The most promising route is a full marketing campaign to sell the new Honda e as much as possible. It is a very nice looking car, but with too small a battery and too high a price. Bigger batteries are expected for next year, too late to evade fines in 2020. Expect some real bargains at the end of 2020 if Honda does not reach the required numbers.
Another option Honda has is to delay until 2021 delivery of plug-less models with too much CO2/km that would put Honda in threat of fines.
Selling more plug-in hybrids would have been an option, if Honda had exported them to Europe. Perhaps we will see the Honda Clarity PHEV reaches European shores in 2020.
For now, all the sales managers of Honda importers and dealers will look at the number of Honda e sold each month. The first months are without a model on the showroom floors. What is a pity, because it is a really good looking car.