In what can be classified as an ironic development, new European environmental regulations are set to kill small cars as we know them. In the coming years small cars with internal combustion engines (ICE) will face extinction specifically due to more stringent WLTP regulations that will demand electrification to meet CO2 requirements. Given that profit margins are already slim on small cars, these added costs would likely drive them from the market altogether.
Autocar spoke with VW sales and marketing boss Jürgen Stackmann and he admitted that there’s simply no business case for a car like the VW UP with an ICE powertrain once these regulations go into effect.
For comparison the VW UP is 28 cm/11 inches shorter than the MINI and is considered a “city car” in Europe where MINI is not. Still the MINI will be affected by these same economics albeit not quite as dramatically. Because of its size and BMW’s long history in electric cars it’s been able to electrify the current F56 with just two years of development time. If sold profitably, that could support ICE cars for years to come. But even still the writing is on the wall. BMW has said on the record that it plans to turn the MINI brand into an electric one. The timing of that is not immediate and there will be many steps that will get us there (the first being the MINI Cooper SE later this year). But clearly that’s where things are headed.
In the meantime automakers are about be cased with tough decisions around how to keep small ICE powered cars on the market not just in the US but Europe as well. The result could be the reduction and ultimate extinction of small, affordable cars.