The rise of hybrid and electric cars coupled with tough emissions laws will mark the end of our diesel love affair, writes Geraldine Herbert
In 2017, diesel car sales fell by almost 20 per cent in the UK due partly to the threat of additional taxes and bans in cities. Sales in Ireland have declined more slowly and the market share of diesel has moved from 70% of all new cars bought in 2016 to 65% in 2017. Fuel choice has become a serious concern for Irish motorists.
Why diesel
Promoted for fuel efficiency and environmental credentials diesel has been the fuel of choice for many Irish drivers for the past decade. In 2008, the Fianna Fail-Green Party coalition changed the VRT and motor tax system from one based on engine capacity to the current one based on CO2 emissions. As a result sales dramatically shifted in favour of diesel. By the end of 2009 the new car market share of diesel had switched from 30% to 70% and diesel sales have been unnaturally inflated since.
VW Scandal
But the VW diesel scandal that unfolded in 2015 lit a fire under the entire car industry and initiated the demise of diesel. It was revealed at the time that Volkswagen had installed emissions software on more than a half-million diesel cars in the U.S.—and around 11 million worldwide to cheat emissions tests. The dangerous levels of pollution due to nitrogen oxides and the harmful impact of diesel cars to people and the environment caused many to rethink their preference for diesel cars.
The situation in Europe
Europe it seemed had taken its eye off the ball and remained committed to lowering CO2 emissions and increasing fuel consumption. In the US there was much stricter emission standards around NOx but then the US could afford to be wary of diesel when the price of gasoline was so lows.
To further compound the problem European testing procedures were inadequate as the gulf between what fuel consumption could be realistically achieved in reality and the results from ideal laboratory conditions widened. Over the past decades car makers could ensure that their test vehicles were optimised to meet these tests in ways that their showroom counterparts could never achieve on the road under normal use. The impact for consumers was they paid more than expected at the pump because of the inaccurate fuel consumption declarations while governments that tax cars on their CO2 output missed out on revenue. According to the International Council on Clean Transportation this divergence not only undermined climate change mitigation efforts but it cost the average car owner €450 per year.
Today concerns are increasing about residual values, the impact of diesel’s NOX emissions on people’s health in urban areas and the result is buyers are no longer simply defaulting to diesel.
So is there a long term future for diesel?
Experts say diesel should not be counted out just yet. It seems we are caught between an immediate health risk due to air pollution and a long term global climate one due to CO2 emissions. By 2021 new EU rules will be enforced that expose car manufacturers to potentially big fines unless their model range CO2 output average is 95 grams per kilometre so to achieve this they will have to sharply increase the amount of electric and plug-in hybrid vehicles in their range. However key to achieving these targets is diesel. Many car makers have also invested heavily in developing diesel technology and will want a return on this investment.
But what of the Irish Market?
Steve Tormey, Toyota Ireland’s chief executive believes the future for diesel is a bleak one. Mr. Tormey predicts that diesel will account for only 45% of the overall market in 2018 while preference for petrol hybrid power trains will double from 3.4% in 2017 to 7% in 2018. Looking further ahead, Mr. Tormey believes that by 2020 diesel could have a market share as low as 20% , with hybrids taking many diesel defectors to make up roughly 25% of the market.
James McCarthy, CEO of Nissan in Ireland sees the biggest winner in the decline of diesel to be petrol, “Our 181 pre-sales figures show a real shift towards petrol cars where there is a choice on offer. The economic factors governing the cost of change and residual values sharply influencing consumer behaviour across the urban and rural divide”.
Nissan Ireland’s CEO also predicts that by 2021 the breakdown is likely to be such that petrol will take 55% of the market share, diesel 25% and electric vehicles and hybrids combined to make up 20% with an expected breakdown of 13% hybrid and 7% electric.
Thinking of buying a 181 car
So if you are thinking of buying a 181 car, is it finally time to ditch diesel or is it still a viable option? For many it’s not simply a choice; if you do a lot of mileage or are in need of towing capacity there is still no real alternative to diesel. It is also worth remembering that not all diesels are equal, new diesels are sold under the much tighter Euro 6 emissions regulations and are in stark contrast to the older, more polluting cars. However there has been a narrowing of the diesel premium against petrol and lower running costs and strong residual values are no longer guaranteed so you need to consider whether the higher price can be justified.
Geraldine Herbert
17th January, 2018
