Exclusive: SAIC's MG Motors joins Volkswagen Group's EU CO2 pool
Updated: Sep 19, 2020
According to exclusive reporting from the European Electric Car Report industry publication, MG Motors, which belongs to China's SAIC Motors, has joined the Volkswagen Group EU CO2 pool between 2020 - 2022 as well as the SAIC Motors Europe BV brand according to the official document published by the European Commission and obtained by this report.
MG Motors, according to the monthly report registered 5,700 pure electric models across the 18 market West European region monitored by the report each month, during the opening 7-months of the year. This consequently saw its BEV share of its total regional registrations reach 47 per cent during the same period, accounting for just over 2 per cent of the total 269,000 BEV market in the opening 7-months of the year. At this moment it is unclear why Volkswagen Group and MG/SAIC have decided to join pools as Volkswagen Group was expected to be CO2 compliant this year, while MG registered just under one tenth of Volkswagen Group's combined West European BEV volumes (59,000) during the same 7-month period according to the report's monthly database. Although Volkswagen Group are unlikely to be compliant at this stage already, a late push during the final 4-months of the year from its newly introduced MEB based models such as the ID.3, ID.4 and new PHEV models and ICE efficiency improvements was thought likely to be enough to push it over the relatively easy 95g/km phased-in 2020 target finish line this year, especially with the full amount of so-called super credits available for vehicles with emissions levels under 51g/km this year. This could suggest Volkswagen Group is in fact struggling and requires the help of an outside party such as in the FCA/Tesla case to get it over the finish line and avoid paying fines.
Second corona lockdown risk could explain the tie-up
Another train of thought is Volkswagen Group may be using this as an insurance policy if a second corona wave lockdown occurs. Unlike French manufacturers' PSA and the Renault/Nissan Alliance that have been meeting compliance on a month-by-month basis since the start of the year, Daimler and Volkswagen Group were always planning on meeting CO2 compliance with a second half push from their newly introduced plug-in models in order to reduce their fleet totals which now appears a risky strategy, exposing them to large fines if a lockdown interrupts this key closing part of the year. Daimler could also be planning something similar with European Commission records identifying Geely's LEVC is open to joining an open pool. BREXIT implications Another likelihood is related to BREXIT. With the UK now likely to independently mirror EU CO2 legalisation next year – once the UK/EU exit transition period ends – but not be included in the EU average it means manufacturers have to meet separate UK CO2 compliance targets . As part of the closed-consultation currently underway, EU pools would also be replicated in the UK system. As the UK accounts for a large proportion of premium and profitable models from from the Volkswagen Group line-up, accounting for 45% of all West European Bentley registrations in the first 7-months of the year for instance, according to The European Electric Car Report data, VW may see it in their own interest as a matter of some form of cost benefit analysis, to pay their Chinese joint venture partners (SAIC and VW have a close cooperation in China and are constructing MEB-based models together at the jointly owned Anting SAIC-Volkswagen plant) for the pleasure of continuing to push profitable high emitting models, in the UK while at the same time meeting their UK CO2 obligations. According to the August edition of the European Electric Car Report, the MG ZS EV was the fourth most registered BEV model in the UK, with more EV models on the horizon. 2020 CO2 pool deadline
Final European CO2 pools have to be declared by the end of the year for 2020, however like a game of musical chairs, if you wait too long you may be left as the last one standing and it appears Volkswagen Group have just grabbed a seat.
More in-depth analysis is available each month in the European Electric Car Report, available on a monthly or annual basis here