German carmakers in a spin ahead of diesel ban ruling

Court will decide on Thursday whether German cities can ban heavily polluting cars, potentially wiping hundreds of millions of euros off the value of diesel cars on the country’s roads.

Environmental group DUH has sued Stuttgart in Germany’s carmaking heartland, and Duesseldorf over levels of particulate matter exceeding European Union limits after Volkswagen’s 2015 admission to cheating diesel exhaust tests.

The scandal led politicians across the world to scrutinise diesel emissions, which contain the matter and nitrogen oxide (NOx) and are known to cause respiratory disease.

There are around 15 million diesel vehicles on German streets and environmental groups say levels of particulates exceed the EU threshold in at least 90 German towns and cities.

Local courts ordered them to bar diesel cars which did not conform to the latest standards on days when pollution is heavy, startling German carmakers because an outright ban could trigger a fall in vehicle resale prices.

Paris, Madrid, Mexico City and Athens had said that they planned to ban diesel vehicles from city centres by 2025.

Meanwhile, the mayor of Copenhagen wants to ban new diesel cars from entering the city as soon as next year.

France and Britain will ban new petrol and diesel cars by 2040 in a shift to electric vehicles.

Evercore ISI forecasts a five per cent fall in diesel residual values could result in a drop of 1.6 billion euros (two billion dollars) in operating profit across eight European and U.S. carmakers.

Analysts at Bernstein Research have said that diesel bans in Europe would hit French carmaker Peugeot hardest, followed by Renault. (Reuters /NAN)