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Jon LeSage

Jon LeSage

Jon LeSage is a California-based journalist covering clean vehicles, alternative energy, and economic and regulatory trends shaping the automotive, transportation, and mobility sectors.

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Europe Cracks Down On Diesel Vehicles

Diesel-powered passenger vehicle sales are declining in Europe as governments put more pressure on automakers to cut production and sales in the post-Volkswagen diesel emissions cheating scandal landscape.

Diesel passenger vehicles are continuing to see sales decline in Europe. In February, diesel car share dropped to 39 percent of the share from 46 percent a year ago. New vehicle registrations increased 4.2 percent to 1.16 million during the month, led by car buyer interest in gasoline-powered SUVs.

This sales trend has been in the works for a while. During 2017, sales of diesel-powered passenger vehicles dropped nearly 8 percent, reaching its lowest level in eight years. Consumer confidence in diesel is being undermined by government threats of penalty taxes, upcoming city driving bans, and falling used vehicle values. 

In February, Germany’s top administrative court ruled that its cities can ban diesel vehicles to improve air quality. It could impact up to 12 million vehicles, and end diesel passenger vehicle sales in Europe’s largest auto market.

Stuttgart and Dusseldorf are expected to be the first cities to enact the ban. Thirteen other cities — in Europe, China, Latin America, and the U.S. — are planning on banning sales of diesel vehicles. Paris and London received a lot of global attention after enacting future diesel vehicle bans last year. Related: China's Oil Futures Launch With A Bang

JATO Dynamics also reported that sales of alternative fuel vehicles (hybrids, plug-in hybrids, and battery electric vehicles) dropped from 4 percent of Europe' new vehicle sales share in February 2017 to 1 percent of sales last month. Fascination with Elon Musk’s Tesla models have helped EVs grow in popularity in Europe; as have the Renault Zoe, BMW i3, Nissan Leaf, and the Mitsubishi Outlander PHEV. But they haven’t yet come anywhere the near the popularity that diesel passenger vehicles had one time held in the market.

Gasoline-powered SUVs and cars are taking the lead for now in Europe.

Gasoline prices staying low and stable is helping, as is the growing popularity of SUVs and crossovers combining style with functionality. SUVs are growing in popularity for transporting kids to school and music lessons, and to pack up the vehicle for camping weekends and bringing home shopping sprees.

For several decades, diesel vehicles had become the norm in light-duty vehicles for most of Europe. Automakers in Germany, France, Italy, and the UK prided themselves on bringing new, high-performance diesel cars to the auto shows until very recently.

German automakers, especially Volkswagen, had been breaking through resistance to diesel cars in the U.S. Their marketing campaigns emphasized performance and fuel efficiency. They were ideal for reaching car shoppers skeptical about electrified vehicles but looking for an alternative to gasoline-powered vehicles.

There were 138,174 diesel light-duty passenger vehicles sold in the U.S. during 2014, the year before the Volkswagen diesel cheating scandal broke. The top three selling diesel cars in that market were the VW Jetta Diesel, the VW Passat Diesel, and the VW Golf Diesel, according to HybridCars.com and Baum & Associates.

In 2017, there were 94,819 diesel passenger vehicles sold in the U.S., a 31 percent decrease from 2014. The top three last year were the Ford Transit Diesel, Ram Pickup Diesel, and BMW X5 Diesel. The Ford Transit is a van that’s becoming popular with fleets, and the BMW X5 is an SUV.

The top sellers in U.S. diesel vehicle sales are now light-duty trucks, while cars dominated the sales list prior to the VW scandal. Vehicles in the light-duty truck segment are more popular with fleets and consumers who use their vehicles for personal use and for work in construction, maintenance, utilities, agriculture, and oil refineries.

Diesel engines offer owners a level of power well suited to driving pickups, vans, and SUVs loaded with tools and capable of climbing up hills without losing power; and to operate efficiently in hot or cold weather conditions.

Related: Can The U.S. Break Russia’s Gas Monopoly In Europe?

As government restrictions on diesel vehicles tighten up, interest is rising in other fuels powering light-, medium-, and heavy-duty vehicles. Tesla is getting a lot of attention for rolling out its Tesla Semi heavy-duty trucks, and Daimler is preparing to roll out medium-and heavy-duty electric trucks.

Continuing regulatory pressure, government investigations into automakers and their diesel passenger vehicles, and growing interest in gasoline-powered and electrified vehicles are taking credibility and sales away from diesel vehicles.

By John LeSage for Oilprice.com

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