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Diesel's Image Crisis Author:Michael Bettencourt Date:03/25/14 Click:

Automakers have touted hybrid, all-electric, E85-fueled, and hydrogen fuel cell vehicles as bearers of better fuel economy, cleaner air, and less reliance on foreign oil. But new vehicles suggest that these complex challenges could find a solution in a far more familiar source: diesel.

Trouble is, what automakers offer and what drivers want don't always match up. Only 6 percent of Americans shopping for a car in January said that diesel was likely to become a mainstream fuel source in the U.S., according to a survey by automotive research firm Kelley Blue Book.

The main advantage of diesel fuel is that it provides significantly better fuel economy than gasoline. Cars can travel up to 30 percent farther on a gallon of diesel fuel than on a gallon of gas. And although some still associate diesels with the smelly, smoky underperformers sold in North America during the 1980s, substantial emissions improvements have been made now that diesel cars can run on the ultra-low-sulfur diesel fuel that was mandated by the U.S. Environmental Protection Agency in 2006.

More than 10 diesel vehicles debuted at the 2008 North American International Auto Show in Detroit this year – a staggering number when compared to previous shows, where maybe one or two, if any, were unveiled with little fanfare. As manufacturers ramp up efforts to start selling new diesel vehicles this fall, it seems as though diesel is becoming the new darling of alternative fuels.

But consumers are skeptical. Of the car shoppers in the Kelley Blue Book survey, 40 percent said that hybrids were likely to become a mainstream option, followed by hydrogen fuel cell vehicles at 20 percent, "flex-fuel" systems that can use ethanol-based E85 fuel at 17 percent, and biodiesel, which is basically recycled vegetable oil, at 10 percent. Diesel had the least amount of support.

Diesel proponents tout this crude-oil derivative that’s less refined than gasoline as being more abundant and readily produced than other alternative fuels such as hydrogen and ethanol. "Diesel has some advantages when you’re talking the next five years," says Mike Lynskey, a technical liaison between Ford and BP Fuels, which distributes fuel at BP, ARCO, and Amoco stations in the U.S. "You can’t distribute E85 through the regular pipelines because of its corrosiveness, so at the moment we have to truck it around."

Jumping the Hurdles

Still, there are various issues that could keep diesel fuel on the periphery in the foreseeable future. Chief among them is the expense associated with the latest diesel engines.

"The Germans keep saying diesels are cheaper than hybrids, which is true if you’re using a diesel engine as a baseline engine," says Jim Hall, managing director of 2953 Analytics, an auto consulting firm in Birmingham, Mich. But when comparing them to gasoline engines, diesel engines can be up to 30 percent more expensive because they require stronger internal components to withstand higher combustion pressures.

Then there’s the expensive emissions technology diesel engines require to comply with federal regulations. "So when you’re talking all those costs over a regular gas engine, you’re talking as much or more of a cost penalty as a hybrid engine," says Hall, a former General Motors executive.

Add to this the complexity of new diesel emissions systems that require a urea reservoir to be periodically monitored and refilled (the urea is added to the exhaust stream to neutralize the toxic nitrogen oxides). Plus, diesel fuel may be more abundant than hydrogen or ethanol, but only about half of all U.S. filling stations offer it.

Lastly, there is diesel price volatility. "Across the U.S., as of mid-January, the average price of premium fuel was $3.30 per gallon; for diesel, it was $3.33," Hall says. "Gas taxes fluctuate from state to state, but the variations are far more ballistic with diesel."

None of these impediments is stopping automakers from testing out diesel ideas and, for some, even launching new diesel vehicles as soon as this fall.

BMW unveiled diesel versions of its popular 3 Series and X5 SUV, both of which will go on sale in the fourth quarter and mark the first time in about 20 years that BMW will sell diesel passenger vehicles in the U.S.

Kia and Subaru announced that diesel engines will be available on their new SUVs. Audi will start selling a diesel version of its Q7 SUV later this year. And Mercedes has announced that diesel variants of the GL-Class, M-Class, and R-Class SUVs will hit showrooms this fall. In 2006, Mercedes was one of the first luxury automakers to make a big diesel push with its "Bluetec" line that debuted on the E-Class Sedan.

Luxurious and alluring concept cars with diesel engines, like the Audi R8 V12 TDI, Land Rover LRX, and Mercedes-Benz GLK Freeside, were also high points of the recent Detroit auto show.

Playing Up Performance

Automakers aren’t just relying on fuel economy to convince consumers that diesel is a suitable (or even superior) alternative to gasoline. They’re touting diesel engines’ power and performance almost as much their efficiency.

Recent studies imply that this tactic may be working: Kelly Blue Book’s survey showed that diesel generated more interest in terms of its performance benefits than any other alternative fuel source. Meanwhile, J.D. Power and Associates’ recent Global Diesel Light-Vehicle Forecast found that diesel vehicles are "no longer associated with poor performance."

BMW says its 3 Series and X5 diesel models coming in the fourth quarter will offer performance on par with top gasoline engines. "This diesel offers more torque than in our M5 sedan," said BMW spokesperson Tom Plucinsky, referring to the company's top-of-the-line midsize sedan with a 500-horsepower V10 gasoline engine and an $80,000 starting price.

Looking at one performance measurement often used in the auto world, the time it takes a car to accelerate from 0-62 miles per hour, the diesel-powered BMW 3 Series, called the 335d, is only three-tenths of a second slower than the gasoline-powered 3 Series, called the 335i. Yet the 335d returns 23 miles per gallon in city driving, and 33 mpg on the highway, much better than the 335i’s 17 mpg city/26 mpg highway.

"As customers become more aware of diesel engines' benefits, we could see greater acceptance in midsize and smaller segments with performance being the key differentiator," says Casey Selecman, a powertrain analyst for Detroit-based CSM Worldwide.

Public awareness of diesel engines is already healthy: More than two-thirds of those polled by Kelly Blue Book were aware of diesel as an alternative fuel, ranking a close third behind E85 ethanol. Consumers were most aware of hybrids.

Selecman sees large trucks and SUVs as the next big growth area for diesels in North America, with technology then trickling down to other segments. "Consumers will get the performance they desire and not have to sacrifice fuel economy to get it," he says.

Crossing the Bridge

Diesels, like hybrids, are seen by some as a bridge to a fossil fuel-free future that can be used in tandem with other alternative fuels.

Looking at BMW alone, diesels already comprise 67 percent of the automaker’s sales in Europe, where diesel fuel has long been popular thanks in part to lower emissions standards and higher fuel taxes that financially incent consumers to drive more-efficient vehicles. "We won’t reach the 67 percent diesel sales level here, and that’s not our intention," BMW’s Plucinsky says. "By 2015, gas certainly won’t be gone. But we hope that diesel will be a sizable portion of the U.S. market, and we will also have some hybrids for the right applications, maybe even a hybrid diesel."

Several new concept vehicles recently unveiled at the Detroit auto show illustrate automakers’ efforts to mix and match alternative-fuel technology. The Land Rover LRX and Saturn Flextreme concepts are both diesel-electric hybrids, capable of running solely on their turbocharged diesel engines, solely on electricity, or on a combination of both.

The Flextreme can even be plugged in for recharging. "Buyers will be enthralled by plugging in their cars, and not having to go to the gas station," says AutoNation’s Jackson. "I’m convinced these types of vehicles will be embraced by American buyers."

Plug-in hybrids are at least two years away from hitting the market in production form, and further still from being sold in high numbers. "Volt will be about 10,000 units the first year, just to make sure we’re prepared for any issues that might come up," says Bob Lutz, GM vice chairman of product, noting that there are still significant development issues to overcome before the technology is optimized for mass market use. "So we’re not going to see a wholesale move to electric vehicles right away."

General Motors sees diesel and direct-injection gasoline technology as short-term solutions to achieving better fuel-efficiency, with electric cars and fuel cells to follow. "It’s not an option to pick just one [fuel] anymore," says Mark A. Maher, GM’s executive director of powertrains. "We don’t see a monolithic fuel like gasoline will continue."

Despite the potential stumbling blocks, sources agree that what will really turn buyers on to diesels is their extra range combined with the impressive low-end power that gives them neck-snapping acceleration at low to mid-range speeds. "With cleaner diesel fuel, yes, there’s a price penalty, but there’s also 30 percent more range, which is key — a lack of range is what killed the first electric car," says AutoNation’s Jackson.

J.D. Power estimates that 17 percent of Americans will be driving diesels in 10 years, which is a more than fivefold increase over 2007.

But few expect there will be a wholesale move to diesels, even if manufacturers keep unwrapping hot new diesel models at auto shows. "Diesel’s going to be a major solution, but not the dominant solution," says 2953 Analytics' Hall. "But before diesel approaches the level of ‘major solution,’ customers will have to more seriously consider it as a viable option."

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