From September 2018, all new cars registered in Europe, India, South Korea and Japan will have to report their official fuel economy and CO2 figures according to the WLTP – the Worldwide harmonised Light Vehicle Test Procedure. In Europe, this replaces the outdated NEDC test (New European Driving Cycle) introduced in the ’80s and aims to better reflect the real-world consumption and emissions performance of new cars. In the second part of this two-part article, we take a closer look at the industry’s response to the new testing regime.
Part 1: What does the WLTP mean for the automotive industry?
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WLTP brings more CO2 headaches for OEMs in Europe
OEMs are subject to EU-mandated future CO2 targets in an effort to reduce emissions – the next one being a fleet target of 95g/km of CO2 in 2021. Missing these targets will mean OEMs will have to pay fines in the form of an excess emissions premium. Considering 2021’s 95g/km limit was proposed under the NEDC test, hitting it under WLTP testing standards will be exceptionally difficult. This is in the wider context of a massive drop in demand for diesel-powered vehicles across Europe – just-auto’s QUBE service sees diesel penetration in West Europe dropping from 46.5% in 2017 to just 23% by 2027. Reduced demand for diesel cars will push OEMs’ fleet CO2 figures up if the mix isn’t adequately bolstered with more electric vehicles and advanced efficient gasoline engines.
A number of European countries due to adopt the WLTP standard set their vehicle tax bands according to CO2 output – typically, the more CO2 a car emits, the more tax the owner pays on it. The transition to WLTP means many cars’ CO2 figures will be revised upwards so, if there’s no accompanying change in national vehicle tax bands, owners will find themselves with a larger bill. The WLTP’s creators say it should be introduced without negatively impacting consumers’ tax bills although it remains to be seen what actions national governments will take in response to its introduction.
…and some benefits
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By GlobalDataWhile many of the implications of the WLTP mean more costs for OEMs and consumers, there is also a small beacon of good news. The WLTP will become the standard economy and emissions test for all EU countries, India, South Korea and Japan – this means OEMs need only one type approval test to be able to sell the same model in all these regions. This will reduce the cost and time taken to get type approval because there’ll no longer be a need to perform multiple different tests around the world.
By the same measure, the WLTP will make it slightly cheaper for OEMs and suppliers to design vehicles and parts. This is because having a single test for numerous different markets negates the need for different powertrain calibrations, with the resultant reduction in complexity lowering R&D costs. Equally, the number of different components needed for localised powertrain setups will be reduced with one uniform standard across all regions adopting the WLTP.
More focus on optional equipment
Another change accompanying the WLTP is the new-found focus on optional equipment. Under the NEDC, different engine and transmission configurations would be tested separately, but individual options wouldn’t be taken into account. This meant OEMs could send a lightweight entry-level model to the test, then claim the same figures for a range-topping model with air conditioning, leather seats and a sunroof that, in reality, would increase emissions. The WLTP removes this discrepancy by requiring that each individual vehicle configuration gets its own CO2 and economy data. To save having to test hundreds of different cars, OEMs can use computer software to calculate emissions and economy data for the rest of the range based on the physical test of just one ‘standard’ model.
Inevitably, this will mean CO2 ranges among different versions of the same model will be much more diverse. Higher-level vehicle trims such as BMW’s M-Sport or Audi‘s S-line could incur a larger tax bill than lower-end trims with the same engines and transmissions. This could push manufacturers to alter what their vehicle’s ‘standard’ specification is, or what options are ultimately offered to tailor their ranges in harmony with the WLTP. Indeed, this could see the growth of cost options that aim to increase a vehicle’s environmental friendliness such as low-rolling-resistance tyres or active grille shutters.
Emissions data and the impact on leasing
The changes brought about by the WLTP will mean that the data covering vehicle emissions and fuel economy performance will become significantly more complex. Previously, a single vehicle range would only have emissions and economy data for each engine and transmission combination. Now, with the addition of data for each individual optional extra, there could be thousands of different data points for just one model – extrapolated across an OEM’s entire range, the increased complexity could make it difficult to locate accurate information on one particular vehicle configuration.
This will be annoying for consumers, but it could be downright disastrous for leasing companies if measures aren’t put in place to help them navigate this vast pool of data. JATO Dynamics notes that these firms “do not possess the bandwidth, technological infrastructures, resources or technical expertise to take complex engineering data feeds in varying formats from multiple car manufacturers”. As a result, OEMs must ensure that leasing agents have the tools and information they need to accurately communicate the environmental performance of their fleets to consumers.
WLTP claims its first victims as BMW axes models
As mentioned, the WLTP’s introduction will push up recorded CO2 figures for most vehicles and, while the changes don’t come into force for new cars until September 2018, the effects are already being felt. In March 2018, a senior source from the UK’s leasing industry spoke to consumer site Honest John and confirmed that they were unable to order certain BMWs from the manufacturer. This included all plug-in-hybrid models except the 5 Series, the M3 sports saloon and certain configurations of the X1, X5 and X6.
It’s thought that, in the case of the soon-to-be-replaced M3, X5 and X6, BMW simply felt it wasn’t cost effective to reconfigure those models for the the WLTP. Equally, the decision to pull its plug-in-hybrid models is significant because it suggests their purely electric performance wasn’t being reflected favourably under the new WLTP regulations. The leasing company source also confirmed to Honest John that they couldn’t order the plug-in-hybrid variant of the Mercedes C-Class, almost certainly for the same reasons.
Responses from the industry
Systems supplier Valeo has noted how the new testing procedure might bring benefits for vehicles fitted with 48V hybrid systems such as the new Mercedes CLS or RAM 1500 pickup. It highlights how the more aggressive acceleration and deceleration phases of the WLTP actually produce more impressive reductions in fuel consumption in 48V hybrid cars compared to the same cars on NEDC tests. It says 48V systems generate a 10-15% improvement in fuel economy on the WLTP but, on the NEDC, this jumps to a 15-20% improvement.
GKN is similarly optimistic about the introduction of the WLTP because it feels the push towards more fuel-efficient powertrains will favour its products. Two significant technologies GKN develops are driveline-disconnect all-wheel-drive systems and axle-mounted electric motors – both of which enable all-wheel drive without the traditional fuel economy penalty suffered by older AWD systems.
Transmission design could also see some changes after the WLTP comes into force. Both Ricardo and AVL found in independent tests that vehicles fitted with stop-start technology didn’t perform as well in the WLTP as they did in older tests, probably due to the reduced number of stop and start events. Additionally, the higher top speeds of the WLTP will favour models with higher top gear ratios that keep engine speeds lower when cruising on the highway. Both Ricardo and AVL expect hybrid vehicles to be the most adversely affected by the new testing procedure.
While the long-term impact on automakers and consumers remains to be seen, WLTP presents both challenges and opportunities to industry players. For OEMs, the reduced number of potential tests and the reduced number of different testing configurations needed will make it easier and more cost effective to get type approval for Europe, India, South Korea and Japan. Consumers will benefit, too, because they’ll get a more accurate picture of their vehicle’s efficiency in comparison to similar models. It’s not a silver bullet, however, because it raises uncertainties over how different nations will modify their vehicle tax arrangements in response to the new testing procedure – potentially raising costs for consumers.
Part 1: What does the WLTP mean for the automotive industry?
The chart below demonstrates the typical jump in CO2 figures affecting vehicles tested under the WLTP:
Source: TNO (The Netherlands Organisation for Applied Scientific Research)
