ACEA study says direct cost increases of Euro 7 proposal higher than estimates

The Euro 7 proposal on pollutant emissions would lead to direct cost increases that are four to 10 times higher than those cited by the European Commission, according to a new study.

The Frontier Economics study, ‘Regulatory costs of Euro 7 – Findings from an industry survey’, commissioned by ACEA, provides an independent and compliant evaluation of the incremental costs per new Euro 7 vehicle, based on estimates by industry experts.

The proposed Euro 7 regulation will increase the manufacturing costs of cars, vans, trucks, and buses. A study by Frontier Economics calculates the per vehicle costs at around EUR2,000 (USD2,163) for cars and vans with an internal combustion engine, and close to EUR12,000 (USD12,979) for diesel trucks and buses. 

These figures are four to 10 times higher than the commission’s estimates in its Euro 7 impact assessment (EUR180-450 (USD194-486) for cars and vans, and EUR2,800 (USD3,028) for trucks and buses).

These estimates comprise direct manufacturing costs only, primarily for equipment and investments. It is important to note that these additional costs do not correspond with purchase prices; instead they drive up prices for end-users even further, according to ACEA, the European Automobile Manufacturers’ Association (ACEA), which  represents the 14 major Europe-based car, van, truck and bus makers. Price increases would likely therefore be higher than the figures cited in the study, ACEA said.

With current Euro 6/VI rules, the EU has the most comprehensive and stringent standards for pollutant emissions (such as NOx and particulate matter) in the world. Exhaust emissions are already at a barely measurable level thanks to state-of-the-art vehicle technology.

“The European auto industry is committed to further reducing emissions for the benefit of the climate, environment, and health. However, the Euro 7 proposal is simply not the right way to do this, as it would have an extremely low environmental impact at an extremely high cost,” said Sigrid de Vries, ACEA director general.

“Greater environmental and health benefits will be achieved by the transition to electrification, while at the same time replacing older vehicles on EU roads with highly efficient Euro 6/VI models.”

In addition to direct costs, the Euro 7 proposal will trigger indirect costs, such as higher fuel consumption. Over a vehicle’s lifetime, this could increase fuel costs by 3.5% – amounting to an extra EUR20,000 (USD21,632) for long-haul trucks and EUR650 (USD703) for cars and vans.

These indirect costs – which are ignored in the commission’s impact assessment – come on top of the direct costs, ACEA said. They would add to the total cost of owning a vehicle, placing additional financial pressures on consumers and businesses at a time of high inflation and rising energy prices.