Daimler avoids fines after hitting European CO2 targets

Germany’s Daimler comfortably reached EU-wide carbon emissions targets in 2020 because of a last-minute boom in the sale of electric and hybrid cars, the boss of the Mercedes-Benz-owner said.

Ola Kallenius said on Thursday the company sold 160,000 electrified Mercedes cars during the pandemic-ridden year and a further 30,000 electric Smart cars, avoiding millions of euros in fines.

The Stuttgart-based manufacturer was an industry laggard in the drive to cut emissions for most of the year and had been expected to take a hit from Brussels.

It was only a “tremendous ramp-up” in sales of electric vehicles in the second half of 2020 that enabled the manufacturer to hit the targets, Mr Källenius said.

The German company’s closest rival, BMW, also met its targets, thanks to strong hybrid sales, while Volkswagen has said it was likely to come close to compliance.

Jaguar Land Rover, which is a fifth of the size of Daimler or BMW, ended up paying fines, despite already facing less stringent targets because of its relatively small scale.

Rules introduced at the start of last year mandated European carmakers to achieve a fleet-wide average of roughly 95 grammes of CO2 per kilometre driven, with some leeway for those with larger models in their portfolio.

Pure electric vehicles sold in 2020 were counted twice, in order to ease the transition.

While the pandemic all-but halted car sales across most of Europe for several weeks last year, demand for battery cars rose sharply once dealerships were reopened, boosted by incentive schemes in several countries including Germany and France.

Many carmakers teamed up with cleaner rivals to avoid paying fines, such as Fiat Chrysler’s arrangement with Tesla or Ford’s deal with Volvo Cars. But some carmakers were unable to find suitable partners.

Daimler’s flagship electric vehicle, the EQC, was released just months before lockdowns began, and sales in the first half of the year were disappointing as a result.

The German carmaker had already delayed the launch of the vehicle in the US in order to boost sales in Europe last year to help it hit the targets.

At the halfway point of 2020, Daimler, which relies on sales of gas-guzzling sport utility vehicles, was still 9g/km short of its annual target, according to the Transport & Environment pressure group.

Roughly 80,000 of the qualifying Mercedes sales happened in the last quarter of the year, the Daimler chief said, when sales of the EQC and Smart models picked up drastically, along with an “absolute boom in plug-in hybrids”.

Daimler, which will offer four new dedicated electric cars in 2021, including the battery-powered version of its S-Class, the EQS, would comfortably reach the 2021 goals too, the Swedish boss predicted.

Final confirmation of Daimler’s compliance will come from EU authorities later in the year.

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