Diesel engines – even super-clean and efficient new designs promised from European and Japanese automakers – appear to be facing an uphill battle for consumer acceptance in the United States.
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Yesterday (28 January) just-auto reported on the latest consumer survey by car buyers’ guide Kelly Blue Book which found that the vast majority of new vehicle shoppers currently in the US market do not see diesel as a likely mainstream fuel source in the future.
KBB’s January research showed that only 6% of shoppers thought diesel was most likely to succeed in becoming a mainstream vehicle powertrain type, compared with 40% who said hybrids, 20% hydrogen fuel cell and 17% who cited flexible-fuel [ethanol mix] systems.
Things appear more positive at Santa Monica, California-based Edmunds.com, a car enthusiasts and buyers’ guide website.
“Within [our] CarSpace community, there’s a lot of interest in diesel vehicles, especially pick-up trucks and VW Jetta TDIs,” noted Edmunds’ corporate communications chief Jeannine Fallon in an email to just-auto.
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By GlobalDataShe said “Diesels in the news” (ie being discussed on reader forums) currently included the Jeep Liberty (exported as the Cherokee), Volkswagen’s TDI models and the Jetta TDI and even the Honda Accord Diesel, which isn’t sold in the US. (Ironically, Honda US recently axed its US market-only Accord Hybrid due to poor sales.)
“There’s a lot of debate over whether diesel is sensible, or will be a more viable alternative option in the long term,” Fallon said. “Those who have diesel vehicles tend to be very happy with their purchases.”
However, consumer motoring website The Car Connection (TCC) has this in a recent blog by editor Marty Padgett: “Modern diesel engines are unlikely to appeal to Americans despite rising fuel prices, General Motors vice chairman Robert Lutz predicts.”
According to TCC, Lutz emphasised GM is developing a full range of diesel engines for use around the world [its range of engines – most developed jointly with Fiat in a now-ended cooperation – are well liked by motoring media here in the UK].
However, Lutz told TCC that overall diesel penetration in the US is likely to remain in single digits for the foreseeable future. That dismisses claims by European automakers and suppliers that diesel has a bright future in the US as fuel prices increase.
“Frankly in the United States, with diesel fuel the same price as (petrol), I don’t think that many Americans are going to pay a $US3,000 or $4,000 premium for a modern diesel engine,” Lutz told TCC’s Padgett.
“On top of the normal diesel premium, you now have advanced emission systems. Unless we decide to eat the cost, which unfortunately we can’t afford to do, I think customers are going to say, ‘Wait a minute. At equal fuel prices I’m paying $4,000 more for this,’” he said. “It will not be like Germany,” Lutz said after giving a speech at the Automotive News World Congress in Detroit.
Consequently, the vast majority of Americans will continue to favour internal combustion engines that use [petrol], which are significantly cheaper than diesel engines, he predicted.
According to TCC, Lutz said the penetration of diesel-powered passenger vehicles in the US would be “more like it is in Switzerland,” 8% to 10%, at best. He noted the tax system in the US simply does not favour diesel power the way it does in Germany.
In Germany and other parts of western Europe, the taxes on petrol are much higher than on diesel fuel, which skews demand towards diesel motors, he said. In the US, petrol and diesel fuel are taxed basically the same and thus cost the same at the pump. The emission standards in Europe also are not as strict as they are in the US, Lutz told TCC.
“In those European markets where diesel exceeds 40, 50% or 60% penetration, you have to know there is a tax differential. [Petrol] is $8 per gallon, diesel fuel is $4 per gallon,” he said. “With that kind of price disparity everyone is going to buy a diesel.”
“In the countries where gasoline and diesel is about the same, percentages are much lower. They’re much higher than they are in the States but they are down around 10% or 12%.
“I’m not advocating taxes hikes or calling for higher fuel prices,” Lutz said. “I’m just explaining the difference between the European fleet and our own.
“In America instead of raising fuel prices, we’ll wind up raising new vehicle prices because of the increased use of lightweight material and fuel-saving technology. By the way, clean diesels do not come for free especially not when they are ‘emissionised’ [to meet new standards], which mean thousand of dollars per vehicle and that in turn is going to cause people to hang on to their vehicle,” he said. “People are going to say, ’Whoa a $35,000 Chevy Malibu. I think I’ll hang on to the one I’ve got for a while.”
Lutz’s comments came just a few months after Mercedes began offering its new Bluetec ‘clean diesel’ in California, where the tougher-than-federal emissions laws have kept diesels off the market for the best part of a decade.
Last October, the German automaker began selling a version of its E320 Bluetec diesel sedan in limited numbers in California through a special two-year/24,000-mile lease.
California’s stringent emissions requirements had kept new diesel cars off the California market for the better part of 10 years, Mercedes noted at the time.
“In order to be able to provide the power and economy of diesel technology throughout the world, we had to make the diesel version as clean as the gasoline model,” the automaker said.
MBUSA began offering the diesel E320 only on lease and priced on par with the petrol E350.
The special limited-mileage lease programme was the first step in the company’s plans to offer consumers diesel alternatives in all 50 states. All-state-compliant diesels will be available across the SUV model lines (M, GL and R- Class) late next year and Mercedes will continue to add to its alternative powertrain offerings.
Volkswagen, whose diesel models have sat out a whole US model year, even in states with the less stringent ‘federal’ emissions (four others also enforce California’s rules), promised a year ago to join Mercedes (and Honda, which has also announced it will sell a new 50-state-compliant diesel, probably starting in 2009) by launching a diesel that meets California emission standards this year.
VW’s ‘cleanest-ever TDI engine’ installed in the Jetta – the automaker’s top-selling model line in the US – has a new two-litre common rail diesel engine with a nitrogen oxide reservoir catalytic converter, complying with the Californian emission standard Tier 2/Bin 5, considered the most stringent worldwide.
The first production run of the ‘Clean TDI’ with nitrogen oxide-reducing post-treatment system will be sold during 2008 in the USA – the US-market Jetta is assembled in Mexico.
The Tier 2/Bin 5 norm also applies in Massachusetts, New York, Vermont and Maine. This norm limits NOx emissions to 70 mg per mile. In order to comply with this standard, completely new emission treatment technology was necessary.
As a result, VW has developed two new systems connected to the oxidation catalytic converter and the particle filter in the exhaust system.
New NOx reservoir catalytic converter technology is currently being tested for car models below the Passat class.
According to The Car Connection, Lutz also said the use of flex-fuel vehicles running on ethanol represents the best way to address the issue of US dependence on foreign oil and the chronic insecurity it breeds. The wider use of ethanol as motor fuel could reduce US dependence on imported oil, he said. “Nothing we can do in the next five or 10 years gets even close to that kind of impact.”
Lutz added that ethanol also is cleaner than petrol and adaptable to the current re-fueling infrastructure and doesn’t require a major shift in consumer behaviour, according to TCC.
