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EDITORIAL
The lady is not for turning

AID Newsletter Editorial 1319 from Peter Schmidt - October 18th 2013
Published: Fri, 18th October 2013 14:27:08 GMT


Angela Merkel VW stand IAA 2013

Open quote signBritain’s Margaret Thatcher, also known as The Iron Lady in much of mainland Europe, was both feared and respected as a tough and uncompromising negotiator whenever British interests were at stake. 

No less so France’s Charles de Gaulle. 

A stern supporter of French interests, with de Gaulle Europe took second place too. 

First and foremost, politicians are expected to represent the interests of their country. 

Germany’s Angela Merkel, in much the same manner, after sweeping to victory for a third term in office only last month, is right to defend German interests. 

That she did last Monday when Germany derailed the formerly planned EU-wide implementation of the 95g/km CO2 fleet average target for 2020.

Germany’s justification: These tough levels would cost German jobs and do great damage to Germany’s premium carmakers. 

Instead, Germany now asks for a postponement of these levels until 2024, and in so doing has the support of countries like Britain, thanks to some cunning manoeuvring on Europe’s political stage.

 Merkel, unlike Thatcher’s highly effective handbag banging, waved her chequebook. And low and behold other countries suddenly saw things her way. 

This marks a radical departure from the past when Germany was a soft touch and for all too obvious historical reasons, was expected to look at the greater European picture rather than German national interests. In effect, an industrial and financial giant, but a comparative dwarf on the highly charged political stage. 

Time to wake up, those days are gone.

Germany’s autoindustry, and prestige carmakers Mercedes and BMW in particular, have a great deal to lose from these tough 95g/km CO2 levels planned for 2020.

Unlike French and Italian carmakers, who could meet these average levels without working up a sweat, thanks to their small cars, for Germany’s prestige carmakers, who are earning their keeps chiefly with large and thirsty muscle cars, these earlier planned 95g/km CO2 levels add up to a very big stretch. 

Evidently, the one option, acceptable super-credits for largely city-going electric cars and plug-ins, would only provide the required relief if in the real world sufficient super-credits can be earned to offset parallel sales of their still high CO2 emitting muscle cars. 

By any measure, following last Monday’s Luxembourg meeting of European environment ministers, the earlier agreed EU deal for the mandatory introduction of the 95g/km levels from 2020 onwards now appears dead in the water. 

Instead, the likelihood now is that Germany gets its way leading to a delayed implementation of the 95g/km levels to 2024 at the earliest. 

Game, set and match to Germany’s hugely influential autoindustry lobby and BMW and Mercedes in particular. 

With the pressure off, there is now little incentive for the likes of BMW or Mercedes for instance to put as many electric cars and plug-ins on the road. 

Conceivably, the decision to postpone the compulsory introduction of 95g/km CO2 levels to 2024 could turn into a major stumbling block for Europe’s already struggling electric car industry, that by rational judgement has already failed to get out of the starting blocks with anywhere near the gusto expected by some. 

Even before latest bombshell events on Europe’s highly charged CO2 car emission front, today’s electric cars simply didn’t make sense for more than 99 per cent of Europe’s car buying public. 

Now that the introduction of these obligatory 95g/km levels has been pushed forward to 2024, almost killing at a stroke the likelihood of heavily subsidised electric cars from super-credit seeking carmakers such as BMW and Mercedes for instance, electric cars make even less sense to Joe Public. 

No doubt, plug-in car technology will shape Europe’s automotive future.

Prior to Monday’s Luxembourg meeting mass market adoption of electric cars was at best 10 years in the future. Now, in light of latest events, we probably have to wait a great deal longer
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