Wall Street Journal 2/ 23/16 3:02 p.m. ET By Mike Spector
U.S. car shoppers’ “extreme” reaction to whipsawing gasoline prices makes it more difficult for auto makers to meet steadily-rising fuel-economy standards, Daimler AG’s finance chief said on Tuesday.
“This is the only market where people are reacting on the fuel price,” said Daimler Chief Financial Officer Bodo Uebber during a meeting with reporters Tuesday. Americans “change in behavior is extreme in my point of view,” he said.
U.S. regulations require auto makers to sell vehicles that get an average of 54.5 miles a gallon by 2025. But consumers currently are flocking to less-efficient pickup trucks and sport-utility vehicles as gas prices drop well below $2 across the U.S.
Higher fuel taxes in Europe limit shifting consumer tastes, Mr. Uebber said.
Mr. Uebber, also a Daimler management board member, said harmonized standards in different global markets would “for the automotive industry make it easier to comply” with regulations.
But the Stuttgart, Germany-based owner of luxury brand Mercedes-Benz is focused on continued investment in electric vehicles to meet separate fuel-economy and emissions standards in the U.S. and Europe, he said.
Nearly all cars could be electrified in 15 to 20 years, Mr. Uebber said, but for now auto makers lack economies of scale to make them widespread with lower prices needed to lure consumers. Sales of electric plug-in and hybrid vehicles for years have hovered around 2% of the U.S. market. “Hopefully it comes to a price level where it’s attractive to the customer on the one hand and makes money for us on the other hand,” Mr. Uebber said.
Mr. Uebber said a lawsuit filed last week in the U.S. accusing Mercedes-Benz of improperly shutting off emissions controls in diesel-powered vehicles when temperatures turn cooler was without merit and that the company was reviewing the matter and would defend itself. He declined to comment further.
He said the German company separately couldn’t predict whether it would need to recall additional vehicles equipped with problematic Takata Corp. air bags linked to dangerous ruptures. Daimler earlier this month recalled 840,000 vehicles in the U.S. with Takata air bags and took a $380 million charge to 2015 earnings. “We have to wait and see,” he said, referring to other potentially expensive recalls.
Mr. Uebber separately said Daimler is steeling for a world where customers shun buying cars for ride-sharing services and other modes of transportation, though he emphasized it isn’t yet clear where the shift is headed. “We have to prepare for a world which is different than in the past,” he said.
He pointed to Daimler’s Car2Go, a car-sharing service that lets customers drop off vehicles wherever they can find on-street parking. General Motors Co. recently invested $500 million in ride-hailing company Lyft Inc. with a goal of eventually developing a service that would allow customers to use smartphones to summon vehicles with no driver required.
A new Mercedes-Benz E-Class car earlier this year received a license to test autonomous-driving in Nevada. The car needs only slight software modifications to drive itself, as opposed to being outfitted with additional sensors and other technology.
Mr. Uebber said Daimler, like other car makers, is in touch with Silicon Valley companies about possible partnerships for autonomous vehicles. He said regulations still need to be developed to help get the vehicles on the road.
U.S. regulators in response to a query from Alphabet Inc.’s Google self-driving car program recently said they would consider a computer a driver for purposes of an autonomous vehicle, giving some flexibility to manufacturers on meeting safety standards. But companies still will have to demonstrate driverless systems are safe.
Mr. Uebber lauded a “new kind of phase” where rival car companies work together on autonomous technologies to increase efficiency when differing brands for consumers isn’t crucial. He pointed to an Audi- BMW-Daimler consortium’s deal last year to purchase mapping technology from Nokia Corp.
Daimler expects car sales, meanwhile, to increase this year from record 2015 levels, but not jump dramatically. Analysts are predicting U.S. auto sales have plateaued after Americans purchased a record 17.5 million light vehicles last year.
Mr. Uebber said Daimler is watching the cooling conditions in China month-to-month but still expects growth in the world’s largest auto market.