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Daimler warns Germany may get tougher on Mercedes diesel cars

Daimler warns Germany may get tougher on Mercedes diesel cars
Business
Daimler AG is warning of a further crackdown on Mercedes-Benz diesel vehicles in Germany, after mounting legal and regulatory costs already crimped profits last year.

Daimler has temporarily halted delivery and registration of some models, according to the report. The German manufacturer also said that complying with stricter emissions rules in some countries will be difficult.

Facing penalties

Chief executive officer Ola Kallenius has acknowledged in recent months that meeting Europe’s tougher emission targets will be a challenge in the next two years because consumers may not move away from choosing combustion engines fast enough.

Under the bloc’s rules, carmakers face penalties if the average of the total passenger vehicles they sell exceeds a level of carbon dioxide emissions. Mercedes-Benz, which makes large-cylinder gas and diesel guzzlers in addition to battery-run models, plans to make use of so-called super credit incentives on electric and plug-in hybrid models to lower its average.

Daimler could face a total of more than 1.5 billion euros in fines in 2020 and 2021 for missing European CO2 limits, according to BloombergNEF estimates. To avoid such penalties, electric vehicles sales must account for about 10 per cent of total deliveries in the region by 2021, compared with about 2.8 per cent last year.

The company’s average fleet emission in Europe was 137 grams in 2019, well above the 95 grams per kilometre stipulated by the rules that start taking effect this year and gradually get tougher by the end of 2021.
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