The Loophole the Auto Industry Uses in the EU to Evade the Emission Rules
Years ago I wrote about my expectation, based on simple logic, that around this time, in the C-segment (e.g., Volkswagen Golf) and the lower-cost models of the D-segment (e.g., Skoda Superb), fully electric autos would become price competitive with their fossil fuel ancestors.
I was wrong. I expected the carmakers to try to get as big of a slice of the BEV market as possible as soon as it became profitable. They are not even trying. Volkswagen is positioning itself as a future champion. The rest, crickets.
What they are doing instead is converting some of their current dirty fossil fuel models to plugin hybrids (PHEV). It keeps the investment in these old models returning a profit longer. PHEV models also have a ridiculously low expected CO2 production per kilometer, the measure to calculate the European CAFE values. Recent research shows that those calculations are simply wrong.
The CO2g/km expectations are based on the WLTP efficiency calculations. These calculations were never designed to reflect real-world use of these vehicles. They are to compare the possible efficiency between different fossil fuel models when used in the same driving pattern. These driving patterns are about average auto use. They are heavily influenced by smaller and older autos. They don’t represent the usage of larger and newer autos, especially not the usage of leased company autos. Also, many automobiles drive more than half of their lifetime distance in the first 3–4 years, when they are used by their first owner.
The earliest PHEVs (e.g., Chevy Volt) were mostly bought by EV enthusiasts who could not find a usable and affordable fully electric auto. They often surpassed the efficiency calculated by the US EPA and other standards agencies. When regulators rewarded this behavior by giving PHEVs the same incentives as BEVs, though, PHEVs became very popular with people who liked the incentive but did not like to plug in. They were used as pure fossil fuel vehicles. In many countries, the regulators learned their lesson and PHEVs were excluded from EV incentives, or at least awarded a smaller incentive.
These PHEV vehicles are counted as emitting 40g CO2/km, whereas, in practice, a typical car emits 120g CO2/km, because it runs on its fossil fuel engine while its electric engine lays dormant most of the time. Remember that a car manufacturer is fined €95/gCO2/km for every car which emits more than 95g CO2/km. Therefore, counting emissions 80g lower than realistic usage saves a company 80 x €95 = €7,600 per vehicle sold.
Since PHEVs are cheaper to build than fully electric cars (because the R&D is more mature), this provides a perverse incentive to produce and sell greenwashed, dirty vehicles.
The WLTP number is for sparse and careful use of the automobile in the most economical way. The typical use of a middle class upper C-segment or D-segment auto is racking up kilometers when time is money. These models are turned into PHEV models en masse. This policy by the carmakers is, therefore, frustrating efforts to lower CO2 emissions from road transport in the EU.
The EU should close this loophole by using the expected CO2 emissions in the first year(s) of usage. The WLTP standard allows for corrections based on real-world emissions. Now is the time to use that correction mechanism.
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