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IVOTY Report: Finding the next game changer

Date: Tuesday, October 3, 2023   |   Author: George Barrow

Euro 7 is a “scandal” according to the boss of Renault LCVs. The exact specification of the regulation is still to be confirmed by the European Commission and the narrowing time frame before the blanket ban of ICE engines in 2030 is causing concern around development of new vehicles and the payback window manufacturers will have to claw back what is likely to be significant expenditure.  

According to the European Commission, Euro 7 standards will be the “first worldwide emission standards to move beyond regulating exhaust pipe emissions and set additional limits for particulate emissions from brakes and rules on microplastic emissions from tyres”. The standard will also see a doubling of the time period in which vehicles are expected to maintain their compliance – “cars and vans will be checked until these vehicles reach 200,000km and 10 years of age” – an increase from 100,000km and five years for the existing Euro 6 rules. 

“The way they’re treating us and the customers by doing this is just a scandal,” says Heinz-Jürgen Löw. The senior vice-president of light commercial vehicles at Renault spoke to What Van? at the unveiling of the Renault Grand Kangoo E-Tech – a seven-seat passenger variant of the Kangoo that will also be launched in the UK as a long-wheelbase van with both diesel and electric powertrains.  

Löw criticised the constantly changing timings for the introduction. He believes the money could be better spent, saying: “For such little improvement on a very particular scope, spending again so much money, I think you can spend a bit more wisely on really carbon neutral solutions.”

Renault CEO Luca de Meo has this year taken on the position of president of the European Automobile Manufacturers’ Association (ACEA) and has been, according to Löw, collecting support for more clarity, striking the balance between what is right for the environment but also for the economy. The concern is that excessive investment in ICE technologies in order to meet Euro 7 standards will take funds and resources away from zero-emission improvements. Euro 7 investment is also likely to have a significant impact on costs for consumers, with the prices of vehicles already increasing due to enhanced safety requirements and technology advances. 

“Euro 6 was a massive increase in cost, so I’m sure mobility will become more expensive. But you have different countries, different regulations and different energy costs, so for high horsepower you may pay a fortune [in tax] but that will mean for the same price you can have an expensive electric car.” 

Mindful that subsidies for electric vehicles won’t last forever, Löw points to other incentives like emissions zone access as reasons for preferring continued investment in EVs over diesel. Looking holistically at the total cost of usage (including parking and emissions zones rather than simply the TCO of the vehicle) will give customers added reason to adopt zero-emission vehicles, although a parity with diesel pricing may not come about before sales of ICE vehicles are stopped. 

“I think combustion engine vehicles will become more and more expensive. We have seen this with Euro 3, 4, 5 and 6. It will happen with Euro 7 but we also have general safety regulations, so having an entry level LCV that’s not so expensive, I think this is more and more difficult if you see all the other functions coming into LCV.” 

Renault will unveil a revised Master van later this year that will be their most powertrain-agnostic model to date with support for ICE, electric and hydrogen propulsion. Similar to the introduction of the Kangoo ZE in 2011, this mutli-platform Master heralds the beginning of a new era in Renault’s LCV products. Although the Master has been electrified for many years, the new platform is built specifically for the multiple powertrains, which should yield higher payloads and larger batteries with greater ranges than before. Large electric vans have failed to gain a foothold in the same way small and medium vans have – Renault still doesn’t have a mid-sized electric van on sale, although the Trafic E-Tech has been announced – but Löw believes the strategy that began more than decade ago was correct. 

“I still think that starting with the small van was the right idea because it’s the one driving around the most and knowing what was possible 10 years ago it was the right decision. It was then the Sprinter, the Crafter and the Master that were next to be electrified because we all thought these are the guys putting a lot of stuff [payload] in, going around and then coming back every evening to charge. More and more what we are seeing is that it’s not just about going out and coming back and charging. In the future it will be about much more than that. High speed charging will be necessary, also the grid doesn’t give the opportunity for overnight changing for 50 vehicles. Maybe it would have been better to start with the Trafic than the Master, but almost the whole industry did that.”   

With the introduction of the Master as Renault’s first hydrogen van, there’s a feeling of déjà vu and the question of whether it’s the right platform to launch with. Stellantis has chosen their mid-sized van as their first hydrogen model with Opel leading development of the Vivaro chassis with a fuel cell. There’s also
the notion, with the benefit of hindsight, that hydrogen should have leapfrogged electricity in the running order, given that so many customers have fears of range, refuelling and battery durability.  

“It is my impression that only in the last two years have people had an interest in hydrogen,” Löw counters. 

“I think earlier wouldn’t have made sense. It’s still premature, still in the pilot phase. I hope we will get enough people interested to get the cost down to have a decent competitive offer because at the end of the day it’s about infrastructure as it’s very difficult to store and to gain green hydrogen from solar or wind. Large vans are the right vehicle to test this because big fleets will say ‘let me try this’ and can get a mobile station [installed on site].” 

Renault’s partnership with American hydrogen specialist Plug Power will enable parties interested in the hydrogen Master to buy into the complete hydrogen ecosystem with electrolysers and green hydrogen production via solar. The big question, though, is will the hydrogen Master be as significant as the Kangoo ZE was at its launch? 

“I think times have changed, there was not the overall pressure from regulation and lawmakers [in 2011]. That’s why this time I think it will go faster. I would say people are more open minded and interested because they have electric vehicles in their fleet. But with hydrogen being able to do 100km more, this might be the game changer.” 

Ironically, finding out if hydrogen becomes the next game changer may well depend on the combustion engine. The stakes are high for the members of ACEA and the “scandal” of whatever the Euro 7 requirements could become.  

Dealer or no dealer 

Electrification might be one of the most talked about topics in the sector at the moment but there’s another theme bubbling away in the background. Agency sales have become a serious bone of contention in recent months, not least because Mercedes-Benz has announced it would adopt the model for its LCVs. New challenger brands in passenger cars like Tesla and Polestar have been able to implement the agency structure from inception, but if legacy manufacturers wish to do the same it will require a great deal more thought and investment. 

While talking to Heinz Jurgen Löw about this, it struck me how divergent the act of purchasing vans has become. Last month, I helped a friend buy a new van, directing them to articles I had written and the online manufacturer brochure. If I could have text a link to buy it I’m sure they would have. But touching and feeling a product, seeing the physical size and having a reassuring face to guide you through the process is vital for many. Löw seems to agree. “I don’t think that we can do better than our dealers,” he says, but admits there’s a need for a “digital customer journey” as well as a physical one. Far from a new phenomenon, he let slip that he has considered it in the past, explaining that in his previous sales and marketing role at Volkswagen Commercial Vehicles he evaluated the case for it in the UK with the ID Buzz. It never happened and he says he remains unconvinced – and for what it’s worth, despite my friend’s experience, so do I.

George Barrow is the UK jury member for the International Van of the Year Award.

 

 

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