Euro 7: Renault boss warns of factory closures as car costs soar
Renault boss de Meo: "We predict a substantial reduction in the new car market by 7-10%."
Luca de Meo said new emissions rules could add up to €2000 to the final cost of a car, throttling demand
Pushing through Euro 7 emissions regulations as currently proposed could push new car prices up by €2000 (£1800), reducing demand to the point that Renault would need to close up to four factories in Europe, CEO Luca de Meo has claimed.
Car makers have expressed anger at the timings and the scope of the proposals, due to come into force across the European Union from 1 July 2025 for new cars and light vans if ratified.
“The Euro 7 proposal will have a strong impact on business and our people. The deadlines are too short and the boundary conditions are too broad,” de Meo said earlier this week, speaking in his newly appointed role of chairman of European car industry lobby group the ACEA.
The extra cost is primarily coming from the “thousands and millions hours of testing that are required to homologate all the engines and variants”, de Meo said in response to a question from Autocar.
He claimed the cost to the car maker would be an extra €1000 per vehicle, which would translate to €2000 added to the price of a new car.
“With such an increase then we predict a substantial reduction in the new car market by 7-10%,” de Meo said. That could mean the closure of four factories by Renault alone, he added.
De Meo’s claimed €2000 additional cost figure is far higher than that touted by the European Commission, which estimated an additional cost of between €90 and €150 per vehicle. That was down from its original proposal that would have added €304.
Volkswagen boss Thomas Schäfer put an even higher figure of between €3000 and €5000 per car and threatened that the Volkswagen Polo faces the axe as Euro 7 rules drive prices up.
The proposals widen the use of emissions controls from around 95% of driving currently to nearly all, the ACEA claimed, thus reducing the situations where car makers could override emissions controls to almost zero.
For example, the vehicle has to maintain agreed emissions levels to temperatures between 0deg C and 35deg C, up from 30deg C, with ‘extended’ conditions to -10deg C and up to 45deg C, when emissions are allowed to rise by a factor of 1.6.
Car makers have also expressed annoyance that testers from external agencies can be aggressive as they want while conducting the on-road element of the test, with the car still having to perform at the same level.
“We also think the conditions as defined today are actually extremely difficult to achieve,” de Meo said.
Car makers say the proposed regulations, designed to reduce pollutants such as NOx, particulates and carbon monoxide, are an unnecessary distraction while they're having to spend big sums of money to electrify their models.
“We argue we could achieve a far better cost-benefit ratio if we reorient the huge investment required by Euro 7, allocating them to accelerating electrification and making EVs more affordable,” de Meo said.