Media & Insight
August 3, 2018
JATO Warns of Widening Disparity between WLTP Correlated NEDC Values and existing NEDC Data
- JATO assumes an average of 10g/km discrepancy between NEDC values and new NEDC correlated values obtained under WLTP, which are calculated using co2mpas
- Only 20% (by volume) of model/versions have been published as being re-homologated under WLTP test cycles
- There is a risk manufacturers could face significant penalties for noncompliance with the CO2 fleet target at 130g/km, if the CO2 assumed difference remains
- Further risk ahead for 2020 and 2021 when the target will move to 95g/km
JATO Dynamics, a global leader in automotive business intelligence is releasing its latest findings on the impact of WLTP on the automotive market as the industry approaches the September deadline, when WLTP testing will apply to all new car production.
The findings indicate that re-homologation to the WLTP test cycle is having a more significant impact than previously thought on NEDC correlated values obtained under WLTP, which are calculated using co2mpas. This could result in significant financial penalties for automotive manufacturers in EU member states where CO2 drives taxes. The new figures indicate that the disparity between NEDC test data and NEDC correlated data under WLTP test cycle is higher than the 8g/km JATO monitored back in April 2018, and that the process of concluding the re-homologation of all vehicles could take longer than expected.
Today, due to increased test numbers, JATO has a larger and more robust sample of vehicles from which to calculate the volume weighted impact on NEDC correlated CO2 values under WLTP testing. Additionally, it is possible to calculate the impact on vehicle segments too.
The analysis of the volume weighted effect of re-homologation finds that:
- A difference of 9.6g/km between the CO2 amount calculated under NEDC testing and WLTP tested (NEDC correlated) values. This is nearly 2g/km higher than the 8g/km previously seen in April 2018
- Difference in CO2 values by segment are shown in the following table
- The majority of cars currently re-homologated are within the A and B segments, meaning this difference could increase even more when additional segments are included where weight is considered to be at +10.3g/km
This comes at a time when the carbon footprint of Europe is likely to further increase. Firstly, there’s a significant shift away from diesel to petrol vehicles across the EU member states, with registrations in H1 2018 showing petrol vehicles increasing their market share by 7 percentage points to now account for 57% of the market. In stark contrast, diesels have a suffered significant decline, with their share of market falling by 9 percentage points to 37% – the lowest for diesel vehicles this century. Finally, and perhaps more crucially, despite Alternative Fuel Vehicles (AFVs) increasing registrations by 30% in volume year on year, that fuel type still only accounts for 6% of the market. Significant progress is still needed for AFVs to plug the gap left by the declining diesel market, if the trend towards petrol vehicles continues.
Once WLTP testing is fully enforced and more vehicles are re-homologated, JATO predicts CO2 values to be even higher combining the fuel type shift mentioned above and the WLTP re-homologation effect.
The findings highlight to the industry that CO2 emissions are a key influencer of EU member state taxes and EU fleet penalties, so a combination of higher readings under the WLTP test criteria, and the shift towards petrol vehicles could have a significant impact on the industry. Today 37% of vehicles registered in EU member states are subject to a CO2 purchase tax, whilst over half of vehicles sold (52%) enforce a CO2 ownership tax – including sizable markets such as France, Germany and the UK. With the disparity between CO2 levels recorded under NEDC test conditions and NEDC correlated values calculated following WLTP test conditions and correlated using Co2mpas, CO2 levels could be significantly higher than previously thought which could result in tax rates changing to accommodate the rising figures. More significantly, automotive manufacturers could face significant penalties, under the EU regulation that penalises carmakers for every gram over the CO2 reduction target.
If not already, manufacturers should take deliberate steps to understand the NEDC correlated CO2 and fuel consumption values, as well as the WLTP emission and fuel consumption values of each vehicle build. This should be assessed alongside the local market tax on emission levels, and vehicle configuration, to evaluate the competitive positioning of their models, avoid fines, and navigate changing consumer preferences.
A spokesperson for JATO commented: “What our latest data shows is that the impact of re-homologation to WLTP testing could be even higher than previously thought. Following our analysis of a sample of the vehicles currently re-homologated, if this is extrapolated to the whole fleet, CO2 values could reach 130g/km in 2019, which is a significant 12g/km increase on the 118g/km currently seen in Europe and above the target set by the EU. As a result, car manufacturers could face a penalty of €95 per gram over the target per vehicles sold. This could amount to a huge financial penalty for the European car industry who registered more than 16 million vehicles in 2017.
“What is also worrying for the industry is that the publication of re-homologated models/versions is not progressing as quickly as expected. It has taken 11 months for 20% of existing model/version in the market to be re-homologated and published, meaning the industry could face a backlog of vehicles that cannot be registered if it isn’t completed by 31 August.”
JATO’s data can be accessed via insight reports that are updated in real time. Data on the dashboards created by JATO are designed to help the industry evaluate the risks and opportunities related to the impact of WLTP testing, and to navigate the potential impact on tax and regulation.
JATO provides a tracking tool of all re-homologations in a dashboard format that:
- Summarises per model version the incremental/decrement CO2 values
- Displays per model version the impact on retail price (if any)
- Displays per model version the impact on local taxes price (if any)
- Displays the date of introduction of re-homologated model/versions
- Displays the market where the re-homologated model/versions have been released first
Notes to editor
- JATO previously released findings stating that the new NEDC declared values – either calculated via Co2mpas (the model developed to convert WLTP CO2 measurements to an NEDC equivalent) or via double testing for new engine calibrations (which have been re-homologated using the WLTP test cycle) – are higher than under the previous NEDC test cycle
- JATO’s analysis is based on public and officially communicated data on NEDC correlated values by OEMs. Registration volumes are based on FY 2017 registrations and segment size is based on FY 2017 data
- All the Big 5 European Markets experienced growth, as SUV’s continued to dominate in April
- European car market sees highest recorded August registrations in 20 years due to 38% increase in business registrations ahead of WLTP
- SUVs make up 40% of total car registrations, as the European market records its best October result since 2009
- European new-car sales growth slowed in October, as big markets posted smaller increases
- European registrations of B-SUVs increased by 16% in July, ahead of the launch of the Volkswagen T-Roc