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Discussion Starter #1
I have just been reading the European directive on reducing emissions from passenger cars.


While it’s widely known that manufacturers have to meet a fleet average emissions target of 95 g CO2 per km and get fined €95 per gram per car that they are over the limit, what I did not realise is that each BEV delivered in 2020 gets counted as 2 cars through a “super credit” incentive scheme.

Super credits
Manufacturers are given additional incentives to put on the market zero- and low-emission cars emitting less than 50 g/kmthrough a “super-credits” system. This already applied between 2012 and 2015 and will apply again for the period 2020-2022.
For the purpose of calculating a manufacturer’s average specific emissions, such cars will then be counted as:
  • 2 vehicles in 2020
  • 1.67 vehicles in 2021
  • 1.33 vehicles in 2022.
A cap on the super-credits is set at 7.5 g/km per manufacturer over the three years.

The average emissions for cars in the EU was 120g CO2 per km in 2018. For a manufacturer with this level of fleet emissions, each additional BEV instead of an ICE car sold in 2020 will reduce the emissions fine by around €21,800.

So why are BEVs for delivery in 2020 more expensive than ICE cars?
Should we be on a buyers strike until we see the prices adjust downwards?
 

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This is not the reason that 2020 BEVs are still more expensive than ICE cars, it's the reason that all the shiny new BEVs we want won't be delivered in 2019 as they won't count towards that target.
 

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"So why are BEVs for delivery in 2020 more expensive than ICE cars?"

Maybe the battery pack is still exorbitantly expensive.

What would happen if the government decided that it would just give consumers battery loans. So after ten years, they take the battery pack for free, and use it in infrastructure projects.
 

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"So why are BEVs for delivery in 2020 more expensive than ICE cars?"

Maybe the battery pack is still exorbitantly expensive.

What would happen if the government decided that it would just give consumers battery loans. So after ten years, they take the battery pack for free, and use it in infrastructure projects.
That's a novel idea!

Do you just scrap the car itself at 10 years or are you expecting a replacement battery to be cheap by then?
 

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Scrap most likely. It does make me wonder why we don't have enough scrap metal in the world for new cars use. Isn't it easier to use this metal than dig it up?

If the battery pack is 70 per cent still viable, they're only really just letting us borrow it for a decade. And if it don't last, chase it up with the manufacturers.
 

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Scrap most likely. It does make me wonder why we don't have enough scrap metal in the world for new cars use. Isn't it easier to use this metal than dig it up?

If the battery pack is 70 per cent still viable, they're only really just letting us borrow it for a decade. And if it don't last, chase it up with the manufacturers.
A huge part of the metal that goes into a car is recycled (can't remember the exact number but it was over 50%). The problem is that one always needs some fresh raw materials... can't go 100% recycled metal..
 

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Oh that's great to hear. The question then is, in the current climate, how do we nudge that closer to 99 per cent.
 

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I have just been reading the European directive on reducing emissions from passenger cars.


While it’s widely known that manufacturers have to meet a fleet average emissions target of 95 g CO2 per km and get fined €95 per gram per car that they are over the limit, what I did not realise is that each BEV delivered in 2020 gets counted as 2 cars through a “super credit” incentive scheme.

Super credits
Manufacturers are given additional incentives to put on the market zero- and low-emission cars emitting less than 50 g/kmthrough a “super-credits” system. This already applied between 2012 and 2015 and will apply again for the period 2020-2022.
For the purpose of calculating a manufacturer’s average specific emissions, such cars will then be counted as:
  • 2 vehicles in 2020
  • 1.67 vehicles in 2021
  • 1.33 vehicles in 2022.
A cap on the super-credits is set at 7.5 g/km per manufacturer over the three years.

The average emissions for cars in the EU was 120g CO2 per km in 2018. For a manufacturer with this level of fleet emissions, each additional BEV instead of an ICE car sold in 2020 will reduce the emissions fine by around €21,800.

So why are BEVs for delivery in 2020 more expensive than ICE cars?
Should we be on a buyers strike until we see the prices adjust downwards?
Doesn't the value per EV depend on the overall volume per manufacturer?

And like everything else, surely the price will depend on supply and demand. If govt incentives and cheap fuel mean it makes sense to buy one rather than an ice even for 30k then why would the manufacturer sell them for less?
 

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Discussion Starter #10
If an ICE produces 130g of CO2 per km, and the manufacturers fleet average is already above 95 g, selling an additional one of those ICE cars costs (130-95) x €95 = €3,325 in fines.

So the size of the fine per ICE car is similar in size to the existing PICG.

So it seems reasonable to think that:
1. ICE cars will become more expensive
2. EVs will become cheaper providing there is sufficient manufacturing capacity to satisfy demand, because selling EVs reduces the fines
3. The current EV incentives for individual purchases from government will disappear soon after 2020

My theory is that we reach the price parity point between ICE and EV in the very near future, not because they cost the same to produce but because of the fines. Effectively fines on ICE purchases will subsidise the purchases of EVs.
 

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So why are BEVs for delivery in 2020 more expensive than ICE cars?
Should we be on a buyers strike until we see the prices adjust downwards?
Basic market forces.
Why would anyone expect them to sell them for anything less than people are willing to spend on them?

If people buy them in 2019 they make money.

If no one buys them they will use the lack of sales as evidence of lack of demand and use that as leverage to get the govt fines reduced arguing that if they don't, they will be out of business factories will close people will loose jobs engineering jobs will be lost and governments voted out of office.

Make no mistake they will be lobbying governments all over Europe and all over the world to that effect. In reality I doubt the fines would be reduced but I wouldn't be at all surprised if the money they paid ends up getting re-directed into helping them "invest in the future" in the form of various grants and tax relief to safe guard jobs and safe guard govts etc

As for 2020 its much better publicity to reduce prices and look good, or only offer deals if they need to, and even better for them if they can meet their carefully balanced targets with little or no reductions in price

Its all a win win as far as the manufacturers are concerned.
 
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