European OEM Strategies for Passenger Car CO2 Emissions Compliance Towards 2030

European OEM Strategies for Passenger Car CO2 Emissions Compliance Towards 2030

The Tipping Point for OEMs to Move to Zero-emissions Driving as a Means for Compliance is Fast Approaching

RELEASE DATE
07-Sep-2022
REGION
Europe
Research Code: MG9C-01-00-00-00
SKU: AU02397-EU-MR_26876
$2,450.00
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Description

Industry-wide fleet average CO2 emission targets for 2025 have been set to be 15% lower than 2020 levels, while 2030 levels will be 37.5% lower than 2020 levels. These targets are more stringent and are for cars only (separate targets are set for LCVs).

Once the focus area for emission reduction, developments in IC engines no longer play an integral role in emissions compliance. Though investment in IC engine development is still beneficial, it is not the primary road to compliance. The availability of flexibilities played a critical role in most OEMs’ compliance in 2020. However, these flexibilities reduce year-on-year, with only eco-innovations continuing to be active while moving towards ZLEV mandates of 15% from 2025 and 35% from 2030.

Most European and American OEMs have increased the sale of PHEVs and BEVs for compliance but Asian OEMs have been late in adopting electric powertrains due to the strong focus on hybridisation. Electrification is fast becoming the de-facto requirement for compliance. All OEMs accelerating electrification, which is showing a higher return on investment from a compliance perspective and will shortly do so from the revenue perspective as well.

Europe has been at the forefront of engine downsizing, which is evident from the high share of direct-injected, turbocharged gasoline engines. Alternate combustion cycles, Atkinson and Miller, are also expected to find increased adoption, with Atkinson Cycle being adopted by OEMs with full hybrids.

With the adoption of diesel powertrains declining in Europe since the dieselgate scandal, mHEVs and FHEVs have stepped up to meet the demand. In the short term, mHEVs are projected to be the leading xEV type and post the highest growth rates. The primary driver for increased xEV adoption was to meet the targets for 2020. The adoption of xEVs however, varies between OEMs, with BMW, Mercedes-Benz and Volvo prioritising PHEVs, while Kia, Renault-Nissan, and Volkswagen focus more on BEVs. Asian OEMs, meanwhile, focus on hybridisation and overall efficiency improvement. With OEMs meeting the targets for 2020 and 2021, it is now clear that maintaining the xEV ratio will suffice until the next set of targets come into effect.

Author: Anjan Hemanth Kumar

Table of Contents

Executive Summary

Technology for Improving Fuel Economy and Emissions

Technology Impact on CO2 Compliance

Technology Impact on CO2 Compliance (continued)

CO2 Emission Projection by OEM Towards 2030

Actual Versus Target Compared to xEV Penetration

Why Is It Increasingly Difficult to Grow?

The Strategic Imperative 8™

The Impact of the Top 3 Strategic Imperatives on the EU and UK Powertrain Industry

Growth Opportunities Fuel the Growth Pipeline Engine™

Research Scope

Vehicle Segmentation

Segmentation

Regional Emissions and Testing Procedures

Global Passenger Car Corporate Average Fuel Economy Targets

EU and UK—Emissions Outlook

EU and UK Passenger Car Fleet Average CO2 Targets

Mass-based CO2 Targets by OEM Pool

Technology Roadmap: Powertrain Development Trends

Flexibilities Towards Fleet Average CO2 Emissions

Fleet Average CO2 Emissions by OEM Pool

Impact of WLTP on Fleet Average Emissions

Importance of Technology for Emissions Compliance

Frost & Sullivan—Forecasting Framework

Industry Average Performance

BMW Group

BMW Group: Impact of Technology on CO2 Compliance

BMW Group: Impact of Technology on CO2 Compliance (continued)

Mercedes-Benz Group

Mercedes-Benz Group: Impact of Technology on CO2 Compliance

Mercedes-Benz Group: Impact of Technology on CO2 Compliance (continued)

Ford Group

Ford Group: Impact of Technology on CO2 Compliance

Ford Group: Impact of Technology on CO2 Compliance (continued)

Honda Group

Honda: Impact of Technology on CO2 Compliance

Honda: Impact of Technology on CO2 Compliance (continued)

Hyundai-Kia Group

Hyundai-Kia Group: Impact of Technology on CO2 Compliance

Hyundai-Kia Group: Impact of Technology on CO2 Compliance (continued)

Renault-Nissan Group

Renault-Nissan Group: Impact of Technology on CO2 Compliance

Renault-Nissan Group: Impact of Technology on CO2 Compliance (continued)

Stellantis Group

Stellantis: Impact of Technology on CO2 Compliance

Stellantis: Impact of Technology on CO2 Compliance (continued)

Toyota Group

Toyota: Impact of Technology on CO2 Compliance

Toyota: Impact of Technology on CO2 Compliance (continued)

Volkswagen Group

Volkswagen Group: Impact of Technology on CO2 Compliance

Volkswagen Group: Impact of Technology on CO2 Compliance (continued)

Volvo Group

Volvo: Impact of Technology on CO2 Compliance

Volvo: Impact of Technology on CO2 Compliance (continued)

Growth Opportunity 1: OEM-supplier Partnerships for Electrification

Growth Opportunity 1: OEM-supplier Partnerships for Electrification (continued)

Growth Opportunity 2: Increased Investment in Vehicle Electrification Through xEVs

Growth Opportunity 2: Increased Investment in Vehicle Electrification Through xEVs (continued)

Growth Opportunity 3: Optimising Combustion for Lowering Emissions

Growth Opportunity 3: Optimising Combustion for Lowering Emissions (continued)

Initialisms

List of Exhibits

List of Exhibits (continued)

List of Exhibits (continued)

Legal Disclaimer

Industry-wide fleet average CO2 emission targets for 2025 have been set to be 15% lower than 2020 levels, while 2030 levels will be 37.5% lower than 2020 levels. These targets are more stringent and are for cars only (separate targets are set for LCVs). Once the focus area for emission reduction, developments in IC engines no longer play an integral role in emissions compliance. Though investment in IC engine development is still beneficial, it is not the primary road to compliance. The availability of flexibilities played a critical role in most OEMs’ compliance in 2020. However, these flexibilities reduce year-on-year, with only eco-innovations continuing to be active while moving towards ZLEV mandates of 15% from 2025 and 35% from 2030. Most European and American OEMs have increased the sale of PHEVs and BEVs for compliance but Asian OEMs have been late in adopting electric powertrains due to the strong focus on hybridisation. Electrification is fast becoming the de-facto requirement for compliance. All OEMs accelerating electrification, which is showing a higher return on investment from a compliance perspective and will shortly do so from the revenue perspective as well. Europe has been at the forefront of engine downsizing, which is evident from the high share of direct-injected, turbocharged gasoline engines. Alternate combustion cycles, Atkinson and Miller, are also expected to find increased adoption, with Atkinson Cycle being adopted by OEMs with full hybrids. With the adoption of diesel powertrains declining in Europe since the dieselgate scandal, mHEVs and FHEVs have stepped up to meet the demand. In the short term, mHEVs are projected to be the leading xEV type and post the highest growth rates. The primary driver for increased xEV adoption was to meet the targets for 2020. The adoption of xEVs however, varies between OEMs, with BMW, Mercedes-Benz and Volvo prioritising PHEVs, while Kia, Renault-Nissan, and Volkswagen focus more on BEVs. Asian OEMs, meanwhile, focus on hybridisation and overall efficiency improvement. With OEMs meeting the targets for 2020 and 2021, it is now clear that maintaining the xEV ratio will suffice until the next set of targets come into effect. Author: Anjan Hemanth Kumar
More Information
Author Bharath Srinivasan
Industries Automotive
No Index No
Is Prebook No
Podcast No
WIP Number MG9C-01-00-00-00