Soaring SUV sales keep carmakers on collision course with climate policy

WNM | Jan 12, 2020 at 1:01 AM

FRANKFURT, January 10 (WNM/Reuters/Edward Taylor) - Soaring demand for SUVs drove record sales for premium carmakers including BMW and Mercedes last year, leaving the industry on collision course with government efforts to tackle global warming despite big investments in electric vehicles.

BMW said on Friday deliveries by its main luxury brand rose 2% to a record 2,168,516 vehicles last year, thanks to a 21% jump in sales of its "X" branded sport-utility vehicles (SUV) which now make up 44% of the BMW brand's global sales.

At Mercedes-Benz, the world's best selling premium car brand, every third luxury car sold last year was an SUV.

Automakers across the world are investing billions in electric vehicles to try to meet tougher emissions regulations. But the jury is out on how many drivers will buy them.

"Consumer preferences for SUVs could offset the benefits from electric cars," the International Energy Agency (IEA) warned in its November World Energy Outlook 2019 report.

The IEA said a doubling in market share had seen emissions from SUVs grow by nearly 0.55 gigatons of carbon dioxide (CO2) during the last decade to roughly 0.7 gigatons.

As a result, SUVs were the second-largest contributor to the increase in global CO2 emissions since 2010 after the power sector - ahead of heavy industry including iron and steel, cement, aluminium, as well as trucks and aviation, it said.

There are now more than 200 million SUVs around the world, up from about 35 million in 2010, accounting for 60% of the increase in the global car fleet since 2010, IEA data shows.

"If the popularity of SUVs continues to rise in line with recent trends, this could add another 2 million barrels per day to our projection for 2040 oil demand," it said.

BMW and Mercedes-Benz say their vehicles are among the most fuel efficient available, thanks to hybrid and other technologies which are already available on the market.

Both carmakers, which say they aim to achieve new sales records this year, are preparing to launch fully electric SUVs - the BMW iX3 and Mercedes-Benz EQC - which they say shows a commitment to a cleaner future.