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Small Cars Could Start Disappearing Even From Europe

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Audi A1 Sportback
Audi A1 Sportback
Photo: Audi

As a jealous American who tends toward small hatchbacks, I have this perception that Europe is a promised land of fun cars I’d much rather drive than the oversized appliances dotting the streets here. And while that might be the case for the moment, it doesn’t seem it’ll stand true a decade from now. Little cars could eventually disappear on the old continent, too.

Audi chairman Markus Duesmann made the depressing premonition in an interview with Autocar published today, saying that the brand may have to bid farewell to the A1 or anything similarly tiny:

“We do discuss what we do with the small segments. In the A1 segment, we have some other brands [in the Volkswagen Group] who are active there and very successful, with very high production, so we do question the A1 at the moment.”

“We will certainly offer Q2s [small SUVs] and the like,” he continued. “That might be the new entry level for us; we might not do anything smaller.”


The problem comes down to profit, as it often does. Very small, internal combustion-powered cars like the A1 or Volkswagen’s Up don’t meet the latest slate of emissions regulations in Europe. To make them viable, they’ll have to go electric in some fashion. But electrifying affordable small cars makes them more expensive — sometimes, a lot more expensive. Take the e-Up for example, which costs nearly £8,000 more than the cheapest gas-powered Up in the U.K. after you’ve factored in the £3,000 grant for plug-in cars.

Image for article titled Small Cars Could Start Disappearing Even From Europe
Screenshot: Volkswagen UK

Small cars don’t leave much room for profit as it is, and jacking up the cost so they can comply with regulations makes achieving a profit even more difficult. At that point, you’d figure most customers would opt for a small crossover instead, like the Volkswagen ID.3, which likely offers better range on account of its larger space for batteries, too.

Ford Europe’s former chairman Steve Armstrong and Maxime Picat, now chief operating officer of Stellantis Europe, summed up the challenge well to Automotive News in 2019:

“Ironically the smaller vehicles are toughest to reduce CO2 in,” Ford of Europe Chairman Steve Armstrong told Automotive News Europe at the recent unveiling of the Kuga SUV. “The smaller the vehicle, the tighter the margin, the harder it is to meet emissions targets.” PSA’s head of Europe, Maxime Picat, agreed. “The ability of any carmaker to make a profit [from minicars] is under pressure because of all of the technology we have to add in our vehicles for safety and for emissions.”

None of this is to say manufacturers have given up on small electric cars entirely. There’s the Honda E, which unsurprisingly isn’t selling well despite its perfect looks. Fiat is also still trying with the new 500, a nameplate that ran its course on this side of the pond. Both advertise relatively short range compared to bigger electric cars — 137 and 199 miles, respectively, under the optimistic WLTP cycle system — which taps into range anxiety, something many of us Americans especially worry about. A recent J.D. Power survey found that 78 percent of U.S. respondents expected a range of 300 miles or more from battery electric vehicles.

For the moment, Japan remains an exception to the trend toward bigger vehicles. Kei cars are still a hit over there after all, and the Japanese government isn’t pushing to go fully electric as soon as countries in Europe are. It hopes to stop the sale of gas-powered vehicles by the “mid-2030s,” though hybrid sales would still be permitted under that plan.


None of this is surprising, though it is nevertheless depressing. We already don’t have much choice when it comes to small cars in the U.S. as it is, so to see Europe begin to move away from them as well pretty much obliterates any chance they’d be imported here. All I can say is that if you happen to own something small and delightful, don’t let it go easily. I’m not about to let my Fiesta out of my sight anytime soon.