Costs deal death blow to small diesels
INDUSTRY NEWS/ Volkswagen will kill off its small diesels within five years, writes Michael Taylor
Exploding costs will kill off all of Volkswagen’s small diesel engines within five or six years. They might have survived the $20bn fallout from the Dieselgate emissions scandal, but modifying its diesel engines to meet the EU’s 2020 emissions laws could balloon beyond €800 a car, enough to wipe the 1.4l and 1.6l diesel engines off the board.
VW’s head of development has admitted the company has all but confirmed it has developed its last small diesel engine, a 1.6l four-cylinder turbodiesel, for 2017’s all-new Polo.
While it will retain the more versatile EA 288 2.0l TDI for Audi, VW, Seat and Skoda sedans, hatches, coupes and SUVs, the smaller three and four-cylinder will be gone completely in about five years, Frank Welsch insists.
They will be replaced, he says, by mild-hybrid versions of petrol-powered four-cylinder engines, most likely to be the allnew 1.5l turbocharged petrol engine, which will make its debut in 2017’s Golf 7.5 facelift.
It means the small Polo and even the Up will get both 12 and 48V electrical systems by 2021 at the latest, to run ISG-type (integrated starter generator) electric motors to provide torque boosts at low speeds.
“Mild hybrids are right on the cost of small diesels.
“They are finished. In the small cars like the Polo, diesel gets too expensive in 2020,” Welsch insists.
“We have to see if there is a future for diesel in these small cars at all.
“The take-rate of diesel in small cars is going down step by step. They are expensive.
“In the very near future, people will say, ‘Okay, there is the normal price of that car but to add a diesel, it’s 25% of what the car’s price is’,” he warns. “They will say, ‘forget it’.”
DEEP IN DEVELOPMENT
VW’s family of small diesels has been shrinking for a few years now, with the 1.2 three-cylinder and 1.6 four-cylinder versions being replaced in the Polo at its 2014 facelift by a lone 1.4l fourcylinder.
The realisation that it needed a new way to lower small-car CO2 levels seems to have dawned on VW only in the past year, with CEO Herbert Diess insisting a year ago that a new modular 1.5l TDI was deep in development.
The company had planned to develop a modular 1.5 TDI to be built deep into the 2020s to be sold alongside the just-launched 1.5l TSI petrol four-cylinder, but all development on smaller diesels has been shelved.
Welsch believes the car market is moving towards electrified petrol power trains swamping small diesels somewhere around 2021 or 2022 — about the timing of the facelift of this year’s all-new Polo.
COMBINATION
“We think there will be a time not so far away that people will go for petrol or a combination with mild hybrid and not diesel,” Welsch insists.
“A mild hybrid is cheaper than diesel and has more or less the same CO2. From my perspective and Mr Diess’s perspective, this is four or five years. Maybe five years, it depends on the markets.”
Besides mild-hybrid petrol power delivering CO2 figures on a par with small diesel engines, the rise in emissions clean-up costs would cancel out the higher cost of electrically boosting petrol motors.
The EU rules for 2020 dictate a European new car fleet average of 95g/km of CO2, though for complicated reasons the VW target is 96g (Daimler and BMW are both on 101, while Fiat Chrysler has an 88g target).
“To make these diesels fulfil these new regulations, it will be at least à600 to à800 per car and that’s just the material costs into these cars,” Welsch says.
“It’s not in the engine, though. The engine doesn’t need to change. It’s for everything behind the engine, all the after- treatment. For a small diesel, the after-treatment is as expensive as the engine is. That’s where we end up. We will have mild hybrids across the range. In most cases we will have 48V power (and 12V power), even for the Polo.”
While small diesels will face a sharp upturn in price after 2020, bigger diesel engines will be better placed to absorb the costs of the upgraded aftertreatment systems that will be mandatory for all diesel engines.
WE WILL HAVE MILD HYBRIDS ACROSS THE RANGE. IN MOST CASES WE WILL HAVE 48V POWER, EVEN FOR THE POLO
NEXT-GENERATION
The burden is not as severe on larger diesels, which can absorb costs in other areas, so Welsch says the 2.0l and 3.0l TDIs will continue to be developed.
“The 2.0l TDI will have a next-generation [engine]. The EA 288 Evo will get down enormously in CO2 and we will start selling that in 18 months to two years.
“That’s where we will invest,” says Welsch.
THE REALISATION THAT IT NEEDED A NEW WAY TO LOWER SMALL-CAR CO2 LEVELS SEEMS TO HAVE DAWNED ON VW ONLY IN THE PAST YEAR