The death knell for diesel-powered passenger vehicles just got louder.
Credit the duplicity of Volkswagen AG. Its diesel deception prompted German regulators Thursday to order a mandatory recall of 2.4 million VW cars there, even as media reports cited a government minister suggesting an end to tax breaks for diesel engines and a stronger industry shift to electric- and hybrid-powered vehicles.
That sound you heard is another collective shudder going through the European auto industry — particularly in Germany, the epicenter of multi-billion-dollar investments in diesel-engine development, production and marketing.
It’s also a collective cheer from the environmental lobby and electric-car advocates on both sides of the Atlantic. In as much time as it takes to say “lyin’ Volkswagen,” they get a massive boost to their campaign to deep-six diesels and accelerate their push for electric cars and hybrids.
That ain’t nothing in the politicized regulation of the auto industry. Until its diesel debacle erupted and affected 11 million vehicles worldwide, VW led industry efforts to showcase and rehabilitate diesel engines, especially among American consumers who either don’t know them or vaguely remember General Motors Corp.’s smoke-belching diesels of the 1980s.
“The circumstances involving a single manufacturer do not define an entire technology or an industry,” the Diesel Technology Forum said in a recent statement. “Vehicle manufacturers and engine makers have invested billions of dollars in research and development to successfully meet the most aggressive emissions standards in the world.”
At least one cheats. By undermining its own “Clean Diesel” campaign with a scheme to game government emissions tests, VW is handing electric-car boosters a metaphorical and technical club to wield with consumers, regulators and politicians, particularly among the German media and in that nation’s capital.
There’s no guarantee the shift conjured by one bureaucrat or environmental activists will happen in Germany, though pressure is said to be mounting on German lawmakers. Automakers like VW, BMW AG and Daimler AG, the parent of Mercedes-Benz, each have enormous investments in diesel technology that color their respective assessments of the staying power of electrics.
As cornerstones of corporate Germany boasting huge workforces, they — and their partners in organized labor — also have enormous influence within the federal government and among the general public, many of whom happily drive diesels and benefit from tax advantages that make diesel fuel cheaper per liter than gasoline.
This isn’t Washington we’re talking about. It’s Chancellor Angela Merkel-era Berlin, where the bureaucracy and lawmakers in the ruling coalition often can move far more quickly than their American counterparts — and probably will. Think the quick wind-down of Germany’s nuclear power business after the Fukushima accident in Japan, or the federal law muzzling attack dogs passed just weeks after one mauled a child.
VW’s diesel scandal may be no different. It is an embarrassment for German industry, its vaunted “Deutschland AG” model, even the nation itself. It clearly is forcing a reappraisal that is more likely to lean toward the official American position on diesels (bad, dirty, in need of strict regulation) than the German one already under suspicion in the United Kingdom, France and Belgium, where taxes on diesel fuel are being raised.
The metastasizing VW mess has “catalyzed negative opinions on diesel,” a ranking European industry official says, focusing attention on emissions and fuel-economy testing across the European Union. Combined with evidence of VW deception, the sentiment is likely to bring regulatory change with meaningful financial implications for automakers — including Detroit-based ones operating there.
In the 20 traditional European markets, excluding Russia and Turkey, diesel-powered vehicles last year accounted for 51.9 percent of all passenger cars sold and 93.4 percent of all commercial vehicles. For Ford Motor Co., for example, diesels powered 43.3 percent of Blue Oval passenger cars sold last year and 98.6 percent of commercial vehicles; diesels account for roughly 40 percent of GM’s Opel- and Vauxhall-brand sales.
As scandalous as VW’s transgressions are in the United States, home to arguably the toughest diesel regulatory regime in the world, they strike far more directly at the driving public and emissions assumptions across most of Europe. More, because diesels are so integral to the product portfolios of European automakers, tougher rules have broader implications for consumers and the industry than in the United States.
For all that, credit at least the software engineers and diesel-engine team at VW, if not their bosses. This is what they wrought.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays and can be found at http://detroitnews.com/staff/27151.
Catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.