VW controversy a further knock on diesels

Michael Martinez
The Detroit News

Volkswagen AG’s emissions-cheating scandal has implications that extend well beyond the German automaker and its 11 million affected vehicles.

The admission that Europe’s largest automaker cheated on pollution tests for its diesel vehicles could mean trouble for the already struggling technology in the United States.

Analysts say customers may be turned off on diesels after the revelation that VW’s engines pumped out 40 times the allowable smog-forming pollution. And that could lead to a rise in hybrid and electric vehicle production as automakers work to reach strict federal fuel regulations by the middle of next decade.

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“You tend to see tipping points, and there’s a very strong possibility this is one for the technology here in the U.S. and opening the door to electric vehicles and hybrids globally,” said Jeff Schuster, senior vice president of forecasting for LMC Automotive. “I think this situation does have the possibility certainly of putting another doubt in the consumers’ minds about diesels from an acceptance standpoint.”

For years, American car buyers largely have shunned diesel cars because of a perception they are dirty, despite their efficiency. Diesel fuel prices until recently have largely remained high, further deterring the public and automakers.

Only 3.4 percent of cars and light trucks sold in the U.S. in 2014 were diesel-powered, and VW provided over 20 percent of them, according to LMC.

By comparison, Europeans have embraced diesels, in large part because of cheaper diesel fuel prices overseas. LMC says diesels account for about half the cars sold there, but the VW scandal could signal a rise in alternative options, Schuster said.

“It’s not just a U.S. situation,” he said. “There’s certainly possibilities this could be a catalyst for opening the door for electric and hybrid technology.”

VW has staked much of its compliance strategy with U.S. fuel efficiency rules with diesels. Nearly a quarter of VW-brand sales here are diesel-powered.

“You’re getting over 40 miles a gallon from a diesel with a 54.5 mpg average due by 2025, it seemed to be a good path to that number,” said Kelley Blue Book managing editor Matt DeLorenzo. “Now they’re paying the price.”

Detroit automakers have largely stayed away from diesel powerplants in passenger vehicles.

Ford Motor Co. only offers the option on its heavy-duty trucks, Super Duty pickups and Transit vans. Fiat Chrysler Automobiles sells diesel versions of its heavy-duty trucks, Ram 1500 and Jeep Grand Cherokee.

General Motors Co. is launching its 2016 Chevrolet Colorado and GMC Canyon diesel midsize pickups. The company also has diesel versions of its heavy-duty GMC Sierra and Chevrolet Silverado, and of the Chevrolet Express, Cruze and GMC Savana full-size vans.

GM spokesman Pat Morrissey said Tuesday that all of the company’s diesel variants are emissions-compliant. He said the company doesn’t foresee the VW issue “having any impact on our current vehicles.”

José Muñoz, executive vice president of Nissan Motor Co. Ltd. and chairman of Nissan North America, said Tuesday that other green vehicle technologies could see a slight boost following Volkswagen’s diesel emissions issue.

“What may or may not happen we don’t know,” Muñoz said. “Our strategy for this market … has always been gasoline. We want to focus on the EV technology that we believe we have the right technology. We have taken a lead on this.”

A spokesman for the Diesel Technology Forum, a Washington, D.C.-area nonprofit that advocates diesel technology, said Tuesday it would not comment directly on the VW case, but still believes clean diesel technology has a role for automakers in the U.S.

“The new generation of diesel cars does provide a significant benefit to reducing CO2 emissions, improving fuel economy as well as lowering emissions of other pollutants,” said Allen Schaeffer, the organization’s executive director. “We see diesel as an important solution for manufacturers working to meet future fuel economy requirements.”

Schaeffer said there were 39 passenger car models available for sale in the U.S. today, and he expects that number to jump to 54 by the end of 2016, although he did expect the VW news will have a yet-to-be-seen impact.

“We’re pretty confident the trajectory for clean diesel in the U.S. is going to continue in the upward direction,” he said.

Staff Writer Melissa Burden contributed.