Is the Diesel D.O.A.?

October 3rd, 2008 at 6:17pm

As published by
WardsAuto.comI’m a big fan of diesels. Or, I should say I’m a big fan of common-rail, direct-injection, turbo diesels. They offer terrific fuel economy, performance and value. I love the way they drive.

That’s why I was sure diesels would take the American car market by storm, just like they have in Europe. But now a trio of circumstances are conspiring to choke off the diesel’s sales potential on both sides of the Atlantic. It all has to do with fuel prices, emissions regulations, and alternative technologies.

In the last year diesel fuel prices have soared both in Europe and the U.S. Historically, diesel was always significantly cheaper than gasoline, especially in European countries. Today, diesel costs about the same as petrol in Europe and it’s significantly more expensive than gasoline in the U.S. For the vast majority of car buyers, higher pump prices for diesel is a deal killer.

Even though diesel engines cost more to manufacture than gasoline ones, car buyers always knew that over the life of a car they could make up for that premium thanks to the diesel’s better fuel economy. But that’s about to change.

Getting a diesel to meet the EPA’s Tier II Bin 5, or the Euro 6 emissions standards, is going to add a tremendous amount of cost to the engine. You should see an engineering schematic of the Blue-Tec emissions system that Mercedes developed! It makes the CERN Hadron Particle Accelerator look like a simple O-ring.

Customers who are used to paying about $1,500 more for a diesel will soon see that premium jump to somewhere between $3,000 and $4,000. Ouch!

At the same time, gasoline engines are being fitted with direct injection and turbo-charging. While this doesn’t give them diesel-like fuel economy, they’re closing the gap and at significantly lower cost. Future technologies such as HCCI (homogeneous charge compression ignition) will close the gap even more.

As a result, diesel sales in Europe this year have fallen below 50 percent market penetration for the first time in nearly a decade. And automakers expect this will turn into a long, slow decline in diesel sales.

All this is happening just as 50-state clean diesels are finally starting to hit the American market. Some automakers, such as Mercedes and VW, already have a devoted following of diesel buyers. Remember, up until the mid-1980′s, something like 75 percent of all Mercedes sold in the U.S. were equipped with diesels. BMW and Audi will soon offer them too.

Diesels will probably sell in the luxury segment where car buyers are not that concerned with the price of fuel, and will willingly pay a premium to get the kind of performance they want. The same goes for heavy-duty pickups and SUVs.

But diesels in mass-market passenger cars? As far as the American market goes, I think they’re dead on arrival.

2 Comments to “Is the Diesel D.O.A.?”

  1. peter haeckl Says:

    I rented an audi A3diesel in europe last year.After owning 35 cars in the last 40 years,this car was the most impressive! I got 43 mpg
    going 110mph sometimes on the autobahn.The torque was unbelieveable.I believe there is a conspiracy by the oil companies
    to raise the price of diesel in order to supress the popularity of diesel cars in the u.s.Think about it:I would mean an instant drop of 20% fuel consumption .You do the math!

  2. sorin ciobotaru Says:

    hello, Peter! kudos to you on your diesel car. i’m european by origin and i was amazed about the poor offer usa has regarding diesels. even though vw and mercedes and audi proved themselves out and even though the big 3 have access to diesel technology from their eu divisions, they are reluctant to bring them here. i think mcelroy in his article proves out how little he actually knows about the industry. usa wants hybrids and electric cars. yes, they’re gonna be here, but when? meanwhile, there’s a mfg gap to be filled between the current high displacement gas engines and the future hybrids/electrics. fill it up with what? nothing! and because of that the big 3 need to drop product lines like trucks and suv’s. my solution: drop turbo-diesels 3.5-4.5L in the trucks and suv’s. i’m pretty sure they’re gonna sell like crazy even though they’re gonna be more expensive. but the fuel consumption will go down by 20-25% at least. i’m quite sure there are engineers in the 3 big which know this and advised it, but management at these guys suck. they don’t have any idea about what’s happening outside their ivory towers (or they chose not to see and listen). granted, they’re gonna lose billions in development, but the market will still be here. this is why i think mcelroy is out of touch.
    John, check the news about mercedes, bmw, vw and audi. and see what are their plans for the near future in usa. and guess which market they target first: california. wake up and smell the diesel.