The EU toughened its stance on carbon dioxide emissions from automobiles. It estimated that about 10% of CO2 emissions in Europe come from cars. The EU has deemed manufacturers to be not as cooperative as hoped in voluntarily reducing the emissions of their fleets.

The EU says that the average car traveling in its countries today puts out 161 grams of CO2 every kilometer. By 2008, it wants that down to 140 grams, and 120 grams by 2012. At the time this was announced, Porsche’s car emissions were somewhat…err…higher than these numbers.

But the little German carmaker responded with ferocity. Porsche announced in March of this year that all of its models will comply with the strict EU5 emission standards applicable as of September 2009 — but that’s not all. It will go a step further by also complying with the even tougher EU6 standards that don’t take effect until September 2014!

Well, if the EU can’t nail Porsche on emissions, surely it can get them on speed…

Bloomberg reported yesterday that Chris Davies, a British member of the European Parliament, wants a ban on any automobiles capable of speeds higher than 162 kilometers per hour by 2013. That’s just over 100 mph to our American readers. As Bloomberg correctly pointed out, that puts almost all passenger cars squarely in the EU’s crosshairs, including the ubiquitous Honda Civic. Ironically, several multi-ton SUVs would escape this particular witch-hunt…

Last Tuesday, Davies said, “At a time when Europe has concerns over its energy security it is sheer madness to allow gas-guzzling cars to be built, which are allowed to travel at a dangerous speed which is totally forbidden by law…”

Self-regulation of speed limits is not without precedent. Years ago, German automakers Audi, BMW and Mercedes established a gentlemen’s agreement to limit their production cars to 155 mph top speed, which was easy enough to perform solely with electronics. Joined later by Lexus, it appeased regulators somewhat, but was also widely thought to prevent a speed war amongst the manufacturers. The advertising potential of building the fastest sedan on the Autobahn must have been tantalizing, though…

At Small-Cap Strategy Report, we’ve written about ways that companies are assisting automakers with increasingly strict emissions regulations. We’ve recommended one company that has a portion of its business dedicated to making engines out of a non-conventional substance. The end result is a substantially lighter motor that requires less cooling. Our other play looks at car efficiency from the aerodynamic perspective. By optimizing how vehicles of all kinds travel through the air, fewer harmful gasses are emitted during the trip from Point A to Point B. Both of these stocks are up substantially since we recommended them, with more upside remaining.

Until next time,
Craig
July 12, 2007

P.S.: In the United States, shares of Porsche are neither listed on NASDAQ nor any other stock exchange. Bids and offers are not collected like other listed securities. That doesn’t make it a poor investment, necessarily. It just makes it a little bit harder for investors to trade and gather information.

However, very soon, we will be launching a brand-new investment service that not only casts light on hard-to-buy securities, but also stocks that are too small for Wall Street to care about. It’s entitled Bulletin Board Elite. It will be one of the few places individual investor can obtain in-depth, independent research on nano-cap bulletin-board traded stocks…

This area of investing has historically contained many mine fields, and the Small-Cap Team at Agora Financial will navigate readers to the best ideas in this group each month. Due to the low liquidity levels of many bulletin board stocks, Bulletin Board Elite’s readership will have to limited to a very exclusive group, which means we are filling up spaces already.

Investing in Foreign Automobiles was originally featured in the Penny Sleuth.