On a mission to meet new emissions
INTERVIEW/ What does plummeting diesel sales do to the company that started its collapse, asks Michael Taylor
Diesel sales are collapsing across Europe and electric cars aren’t picking up the slack because petrol power is on the rise again.
Cities from Paris to London to Stuttgart are moving to ban the compression fuel, and behind it all is the lingering taint of Dieselgate and the host of immoral testing “fiddles” uncovered in its wake.
From a rounding error beneath 50% of the market in late 2015, diesel’s penetration in Germany has dropped to a third, a stunning fall from grace for a fuel once praised for low carbon dioxide emissions and boosted by government tax incentives across Europe.
But the company that triggered diesel’s collapse isn’t remotely concerned by the way the fuel is now being shunned by buyers.
“In 1993 the share was 15%. That was okay then, as well. I’m not bothered by diesel share. It’s no problem,” says Volkswagen brand CEO Herbert Diess.
Tighter European regulations for nitrogen oxide emissions pushed VW to lock in plans a long time ago for a world with fewer diesel cars. According to Diess, diesel will remain at the forefront for larger and highmileage cars and sport utility vehicles (SUVs), while Golfsized cars will reduce their carbon dioxide emissions by moving to 48V mild-hybrid technology attached to petrol engines.
“Things will change because diesel engines are becoming more expensive,” he says.
“The shift in that segment from diesel to gasoline won’t be a problem. In the higher segments that just won’t happen because for people driving 30,000km or more a year, diesel still is the best offer. Even if you have to pay more for the after-treatment and emissions systems, diesel will remain there,” says Diess.
“If the rules and applications are applied to everyone and you don’t change the competitiveness, the question is always in our industry are we fast enough, do we have enough capacity to do all the applications.
“That will be challenging in the next years because we have to basically do new homologations every year because the legislation is becoming tighter and tighter, but it can be done. Diesel engines are becoming more expensive but the technology is there.”
KYOTO AGREEMENT
The difficulty with all of this is that mid-1990s European governments pushed hard for diesel-powered cars to pull down carbon dioxide emissions to meet their Kyoto Agreement greenhouse-gas obligations.
Now diesel power has an inescapably obvious nitrogen oxide problem, but a switch to petrol power won’t help with the ever-tightening carbon dioxide limits.
“We calculated an aggressive strategy that would mean we would be coming with very efficient gasoline engines with mild-hybrid and 48V, combined with an automatic gearbox, which has the same CO2 [carbon dioxide] sticker as a manual
WE HAVE TO BASICALLY DO NEW HOMOLOGATIONS EVERY YEAR BECAUSE THE LEGISLATION IS BECOMING TIGHTER
diesel. At the same price level,” he insists.
“If you really consider for us an aggressive change scenario out of diesel into gasoline, it would add only another two and a half grams to our brand target, which is in the window.
“The 2.5g increase can be compensated for elsewhere (electric cars).
“Our main segment is Golfsized cars and small SUVs. This calculation might look different for a premium manufacturer.”
While VW has rightfully been pilloried for its emissions cheating software, Diess refuses to be drawn into criticism of the side of the transport business that does the greatest environmental harm — international shipping.
“We are acquainted with being dealt with differently as an industry,” he observes.
“If you would consider us like any other industry, a tonne of emission trading now is €8 or €10 or so. To avoid a tonne on the automotive side costs you 10 times as much. This is not reasonable,” says Diess.
“The automotive industry has always been different. We have different tax schemes, the customers are prepared to pay more. So the car industry is always dealt with differently and we are used to that.”