Is The Diesel Dead?

March 23, 2015

The U.S. can be confusing to Europeans. They don't understand our versions of football or coffee, and please don't get them started on our waistlines. (After an eye-opening trip to a certain big-box store, a French visitor once said to me, "Yes, of course we have fat people, but they do not go out.")

Nor have they traditionally understood our aversion to diesel vehicles, but according to Detroit News, that may be changing -- not because shoppers aren't interested in diesels, but because incentives could soon guide Europeans elsewhere.

DIESEL: A BRIEF HISTORY

Several decades ago, America gave diesels a chance. Following the oil crisis of the 1970s, shoppers were more concerned than ever about fuel economy. The world's first mass-market hybrids were still years away, and so, many drivers turned to diesels.

It did not go well.

For starters, the diesels of that era were loud and obnoxious. To the blind, it was probably hard to distinguish between a big rig and a family station wagon. For some, just the smell of one of those diesels was a deal-breaker.

Then, there was the question of infrastructure. Owners quickly learned that not every gas station carries diesel. We had to change our habits and drive different routes. On long family road trips, parents scanned billboards for any mention of diesel. Elon Musk was still in short pants, but we were already familiar with the concept of range anxiety.

And so, the minute fuel prices relented, we abandoned ship and returned to good old gas.

Companies like Volkswagen still insist that diesel is a better way of boosting fuel economy and cutting emissions. They criticize regulations like those put forward by the U.S. Environmental Protection Agency that encourage the development of hybrid and electric vehicles, ignoring the possibilities offered by diesel.

But there's no getting around the fact that, by and large, Americans just aren't interested in diesel. Some of us still bear the scars of those old, rumbling, 1980ish models, but more importantly, Americans are always in search of the Next Big Thing. There's a reason that the hot, upstart automakers of today -- Tesla, Google, and (allegedly) Apple -- are focused on electric cars, not diesels.

But what about Europeans? For now, Europe remains devoted to diesel, but it seems to be getting the hint.

ADIEU, MON DIESEL

Despite repeated warnings of a collapse in the diesel market, demand remains strong in Europe. According to Peter Schmidt, editor of Automotive Industry Data, diesel sales in Western Europe accounted for 53.3 percent of the market in 2014. In 2013, the figure was 53.5 percent. Not much of a decline.

That could soon change, though -- not because shoppers are ready to move on, but because governments may encourage them to purchase other vehicles.

London, for example, is planning new emissions standards that aim to keep diesels out of the city center. On that front, however, the industry is ready for a counter attack: Great Britain's  Society of Motor Manufacturers and Traders recently launched an awareness campaign to reiterate that modern diesels aren't just efficient, they're clean, too. Lab tests offer them some quantitative evidence to back up those claims.

However, those stats won't do automakers much good if governments focus on encouraging electrics rather than banning diesels. (The distinction is subtle but important.) France is leading the way on that front: among the changes under consideration is a significant new incentive that would offer consumers €10,000 ($10,888 U.S.) for ditching their diesels and buying electric cars. 

OUR TAKE

In Europe, reports of diesel's demise are greatly exaggerated, but it's true that the sector has probably peaked. It's not just that the prices of alternative, fuel-efficient vehicles like hybrids and EVs grow more competitive every year. It's also that most of the world has moved on.

Europe may hold a sentimental attachment to diesels, but it's not likely strong enough to keep those vehicles in production. These days, Europe simply doesn't hold sway over the world's economy the way that America and China do. (On the other hand, America's stubborn adherence to the Standard/Imperial system of measurement is perhaps only made possible by its economic dominance.)

In short, companies like Volkswagen can continue to focus their energies on diesel development, and they'll probably remain profitable for another decade or so. But they'd better turn more of their attention to electrics, or they risk becoming quaint oddities instead of major players on the world's automotive stage.  

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