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Tug of war between SUVs and climate

There is a tug of war going on between vehicles we are supposed to be driving – small, electric – and vehicles we want to drive – big, conventional. Some 200 million SUVs are on the world’s roads today, up from about 35 million in 2010. Yet the International Energy Agency says SUVs were the second biggest contributor, after the power sector, to increases in global emissions of CO2. Growing demand for SUVs could even negate all the environmental benefits of electric cars.

If consumer preferences go in one direction, and government policies go in the other, who is going to win?

Consumer preferences are strong

Last year, 42% of cars sold worldwide were SUVs. During 2019:

  • Every third luxury Mercedes-Benz sold was an SUV or crossover
  • BMW “X” crossovers made up 44% of global sales and saw 21% jump in sales
  • Volvo SUVs and crossovers were 63% of global sales, up from 56% in 2018
  • Jaguar, a sports car and sedan brand, sold 70% SUVs in the first half.

For Australians, our preference for SUVs was made very stark in Holden’s recent decision to stop making Commodores. Their reasoning: “customers are displaying a strong preference for the high driving position, functionality and versatility of SUVs and Utes”.

SUVs saw the smallest drop (-2.4%) in sales during what was a bad year for new vehicle sales. Toyota HiLux was the top-selling vehicle in 2019 followed by Ford Ranger, then Toyota Corolla.

In the US, about two thirds of sales are already SUVs and pickup trucks. LMC Automotive says by 2022, 84% of GM, 90% of Ford and 97% of Fiat Chrysler vehicles will be trucks or SUVs.

The reasons we prefer SUVs are no longer based on being 4WD. Buyers look for height, room, comfort and boot space. While passenger cars can offer these things, strong marketing tells buyers SUVs are more practical and fun to drive. Sales of station wagons and vans have certainly suffered in this regard.

Concerns about global emissions

The IEA says world preferences for SUVs are so strong, they could offset the benefits of electric cars. Market share of SUVs doubled during the last decade and pushed global emissions from nearly 0.55 gigatons to 0.7 gigatons of CO2.

UK Energy Research Centre claims SUVs emit a quarter more CO2 than medium-sized cars and nearly four times more than electric cars. If most SUVs are on the road for at least a decade, that means another 8.2 million tonnes of CO2.

Meanwhile, European Federation for Transport and Environment blames the popularity of SUVs, rather than reduction in diesel sales, for recent rises in new-car CO2. It claims CO2 emissions have risen by 2.6g/km since 2013, compared to only 0.25g/km because of lower diesel sales.

Carmakers have responded by introducing various levels of electrification. But it is not really clear that people are going to buy the cars that emissions regulations force companies to make.

SUVs make better hybrids

Midsize and large SUVs, in particular, are sensitive to increased anti-pollution regulations. For most SUVs “electrification” will not be fully electric, but a spectrum of hybrids from 48-volt mild hybrids to conventional and plug-in hybrids.

This is because SUVs are harder to electrify than smaller vehicles but easier to make into hybrids. They also require fewer modifications than sedans to prevent occupant injuries from a heavy battery and costs of hybridisation are covered by higher priced SUVs.

Given the pressure on governments and carmakers to reduce global emissions, when will SUVs stop being the car of choice? The tug of war will probably continue as long as the generation that grew up with conventional cars keeps on driving. Some car executives say young people will rebel against SUVs because their parents drive them. They may be “bored” with SUVs, and more open to owning a sedan.

As one Nissan executive said, “The sedan is the middle finger of the future. It’s the tattoo of the future”. But this depends on whether young people want to own a car at all.

Corrina Baird

Writer and expert greenslips.com.au

Corrina used to lend her car to her kids and discovered first hand what Ls, Ps and demerits mean for greenslips. After 20 years of writing and research in financial services, she’s an expert in the NSW CTP scheme. Read more about Corrina

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