Soaring SUV sales keep carmakers on collision course with climate policy

Soaring SUV sales keep carmakers on collision course with climate policy
Soaring SUV sales keep carmakers on collision course with climate policy

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Jeddah - Yasmine El Tohamy - FRANKFURT: Soaring demand for SUVs drove record sales for premium carmakers including BMW and Mercedes last year, leaving the industry on collision course with government efforts to tackle global warming despite big investments in electric vehicles.
BMW said on Friday deliveries by its main luxury brand rose 2 percent to a record 2,168,516 vehicles last year, thanks to a 21 percent jump in sales of its “X” branded sport utility vehicles (SUV) which now make up 44 percent of the BMW brand’s global sales.
At Mercedes-Benz, the world’s best-selling premium car brand, every third luxury car sold last year was an SUV.
Automakers across the world are investing billions in electric vehicles to try to meet tougher emissions regulations. But the jury is out on how many drivers will buy them.
“Consumer preferences for SUVs could offset the benefits from electric cars,” the International Energy Agency (IEA) warned in its November World Energy Outlook 2019 report.
The IEA said a doubling in market share had seen emissions from SUVs grow by nearly 0.55 gigatons of carbon dioxide (CO2) during the last decade to roughly 0.7 gigatons.
As a result, SUVs were the second-largest contributor to the increase in global CO2 emissions since 2010 after the power sector — ahead of heavy industry including iron and steel, cement, aluminum, as well as trucks and aviation, it said.
There are now more than 200 million SUVs around the world, up from about 35 million in 2010, accounting for 60% of the increase in the global car fleet since 2010, IEA data shows.
“If the popularity of SUVs continues to rise in line with recent trends, this could add another 2 million barrels per day to our projection for
2040 oil demand,” it said.
The German carmakers say their vehicles are among the most fuel efficient available, thanks to hybrid and other technologies, adding customers could also choose to buy smaller, more frugal cars instead of SUVs.

FASTFACT

There are now more than 200 million SUVs around the world.

Both BMW and Mercedes owner Daimler say they aim to achieve new sales records this year, and are preparing to launch fully electric SUVs which they say shows a commitment to a cleaner future.
While acknowledging the growing popularity of SUVs, Germany’s powerful VDA auto industry association said much of the demand was for more efficient models.
“Only just under 5 percent of SUVs are large luxury class vehicles. The market success of the SUV segment is mainly due to the model offensive in compact and medium-sized SUVs, with correspondingly lower fuel consumption,” VDA said on Thursday.
The newly registered SUVs of German group brands had reduced their CO2 emissions by 35% since 2008, it added.
European Union lawmakers agreed in December 2018 that automakers had to cut CO2 emissions from cars by 37.5% by 2030 from 2021 levels, in addition to a 40 percent cut between 2007 and 2021, or face fines.
Evercore ISI analysts say the average German auto fleet emission is still too high at around 124 grams per kilometer in Europe, compared with the average limit of 95 grams per kilometer for 2020.
“The current CO2 performance is simply not good enough and we continue to flag that carmakers run the risk of facing considerable fines if more is not done,” they said in a note.
Electric and hybrid vehicles made up only 3.9% of new European sales in the third quarter of 2019.
BMW plans to launch 25 hybrid and electric cars by 2023, with more than 12 models being fully electric versions.
By 2025, half of all its cars are expected to be hybrid or electric vehicles, it said.

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