New rules came into play last month when the European Union passed guidelines which allows the Commission to recall vehicles and even seize their certification if they fail to meet EU emissions standards.
Under the new legislation the Commission can also issue fines of up to 30,000 Euros for every vehicle in breach of EU laws on emissions or safety.
This step change has been in the making for quite some time, dating back to as early as 2013 when the EU began interrogating its rules, which were altered for good following the widely documented emissions test scandal of 2015 in the United States.
As reported in AutoNews.com, these new rules could expose automakers to compensation claims from European customers if they purchase a vehicle which is later taken off the roads for breaching EU law.
This is something that automakers will have seen coming for years and will have planned for in their risk strategies. We have also documented the rise in recalls citing environmental risks in many of our recent insights reports and blogs, signifying that many national authorities have played a key role in acting upon the risk.
However, what this means now is that national authorities would no longer issue these fines. It will now fall into the jurisdiction of the European Commission who have said that the old system has not allowed cars to be fixed quickly on a wide enough scale.
While these measures seem tough, they are here to stay and that means automakers across the globe will be on high alert to ensure they don’t fall foul to what could turn out to be a substantial fine. And there is no loophole either. By having one authority, it means that no Member State can block the measures taken.
Furthermore, the Commission has invested 7 million Euros for two testing labs, demonstrating its commitment to its new responsibility.
Looking at the data for 2020 (to date), there has been only six recall notifications cited for environmental concerns. Over the course of 2019, there were 16 alerts submitted for that same reason. And only two in 2018. With this new legislation, we expect there to be an increase in recall notifications cited for environmental concerns, however, it is difficult to predict whether it will be a sizeable uplift. This is because manufacturers and Original Equipment Suppliers already have a trained eye on their emissions, because of lessons learned from previous scandals.
New market entrants such as tech companies who work with manufacturers will be key to all of this. They will be the difference between emissions risks featuring on the recall tables or not. And it is these new relationships that auto manufacturers must take the lead on. OEMs know the landscape best and it will be their stewardship that will help the industry rise to the emissions challenge.
Big Tech, or the Tech Giants are some of the most dominant companies globally. When they made their debut in the automotive industry, they did so in the form of infotainment. Now digital services around connectivity are growing at pace and this means that the likes of autonomous driving will see Big Tech asserting themselves in the car’s operating system and hardware. And as the technology advances, so too must your recall preparedness strategy. Nothing is ever perfect – all we have to do is glance over our shoulders at recent history to predict how this might play out when it comes to emissions reporting. You must, above anything else, be prepared.