Pfäffikon SZ, Switzerland – Several German cities increasingly demand stricter requirements for cars that can drive in the city center. From 2018, Stuttgart –a true bulwark of the German automotive industry– wants to allow only the newest diesel cars on days with too many emissions of fine particulates. Meanwhile, new and green initiatives in Zurich are unfolded by BMW and Uber.
The diesel car is increasingly under pressure. Dealers keep saying that the residual values of diesel engines do not fall or just slightly decrease due to the emissions scandals fueled by VW. Nevertheless, it is striking that the residual value in Switzerland of, for example, a used Mercedes S350 diesel is woefully low. In Germany, employers already warn of a mobility crisis with severe economic consequences. The diesel car is common in Germany, so this large group may be forced to purchase a cleaner car. Apparently, a lot of consumers see already what is coming and avoid the diesel car. A drop in prices is a logical consequence.
When walking in Zurich, you stumble across diesel cars used as taxis. One of BMW’s spearheads is to respond to further urbanization and transport problems. Many years ago, BMW announced its intention to invest in cleaner city transportation. With the development of the BMW i3, BMW has expanded its neck to offer a suitable solution. It is worth mentioning that the i3 is largely made of recyclable material. So do not look strange when the dashboard comes from a stack of old plastic coke bottles. But that obviously not yet everything.
Mid-September, BMW, and Uber will launch a green initiative in Zurich and the surrounding area. Consumers in Zurich can then choose Uber Green, Uber X or Uber Black via the Uber app. Someone choosing Green will be picked up by a new BMW i3. Meanwhile, Zurich has about 45 charging stations, and thus the action radius (about 200 km) of the i3 does not seem to be a problem for drivers.
The initiative of BMW and Uber is to be praised; Emissionless transport is the future. Additionally, the customer instantly receives an impression of a fully electric car and can share the experiences of and with the driver. The combination of a Uber service and a BMW product at a competitive price is attractive to the customer. I would not be surprised if consumers choose a “Green Ride.”
It remains for me to wish you a good weekend.
Jan Dwarshuis is CIO at Thirteen Asset Management AG. Dwarshuis writes his columns in a personal capacity. Professionally, he holds positions in major European, American and Russian stock funds. The information in his columns is not intended as professional investment advice or a recommendation to make certain investments. At the time of writing, he has a position in BMW and not in other above mentioned shares and has no intention of doing so in the next 72 hours.