Volkswagen’s Diesel Scandal Could Bring Positive Changes To the Automotive Industry

Since last Friday when the Obama administration pulled the cover off of Volkswagen AG’s diesel emission cheating scandal we’ve heard a steady beat of bad news, but good could come of it as well.

That “good” of course depends on your worldview and more remains to be seen as new disclosures add to the controversy now spread to Europe where half of all new cars are diesel.

What’s at least certain is a rock as big and heavy as a Jetta TDI was dropped into an already PDATnsettled alternative energy transportation pond, and the ripples continue.

At this juncture, outcomes with positive potential include: 1) A reconsideration of diesel is quaking through government, industry, and the public; 2) Emissions laws in Europe may be made more effective; 3) Electrified vehicles may get a boost.

Rethinking Diesel

Environmentalists had for years said the handwriting was on the wall. Particularly in Europe and the UK concerned voices were saying there was a discrepancy between claims and actual air quality in diesel-intensive environments.

But the VW controversy started the dominoes falling in a classic case of crisis management attendant with vested interests piping up for and against.

At the moment, we’re hearing more who are against with the industry on the defensive.

Serious particle smog episode in London. © Simon Birkett 2014.

Serious particle smog episode in London. © Simon Birkett 2014.

As if on cue, some media reports have stepped into gear to leverage the growing scandal over Volkswagen, and what may include other manufacturers as well.

Everyone is innocent until proven guilty, but some in the court of public opinion may hold diesel guilty until proven innocent as new concerning evidence comes to light.

Today it was reported the European Federation for Transport and Environment reviewed data from ICCT, the group that first pinpointed Volkswagen, and said other German carmakers may be also implicated.

The organization noted discrepancies between BMW, Mercedes-Benz and General Motors Opel division cars’ real world and lab emissions results.

German magazine Autobild also just reported it tested a BMW X3 diesel and found it to have 11-times the NOx emissions levels it was certified to have under European law.

Mercedes and BMW say they are not cheating and GM was unavailable to comment.

And indeed, all should be presumed innocent until proven guilty – which they have not been.

However, against this backdrop, brewing tensions that predate Volkswagen’s admission of U.S. and EU emission cheating have Europeans and those stateside as well revisiting how “green” diesel really is.

Diesel exhaust has generally been seen as a component of air pollution, and while some reports do not specify what percentage comes from passenger diesel vehicle tailpipes, public unrest is being fomented against diesel.

Here’s one report from UK’s Skynews:

Estimates are that across Europe there are up to 500,000 premature deaths because of air pollution.

In London in 2010 the Mayor’s office says there were 3,500 premature deaths due to dangerous airborne particles, while Nitrogen Oxides caused 5,900 premature deaths.

Even short-term exposure has been found to cause an increase in deaths from heart disease by just under one percent, and from lung disease by just over one percent.

 

The report does not say diesel caused all those deaths, but diesel engines – including in old, poorly maintained or modified cars and commercial vehicles – are being highlighted as a contributor to air quality, and people who may not think critically may make assumptions.

Factual info includes diesel is subsidized in Europe as “green,” and clear is emissions laws and controls are either 1) not working well enough, or 2) being circumvented on a scale reminiscent of dopers on the Tour de France.

Will America Avoid Europe’s ‘Clean’ Diesel Problems?
From the UK also, Reuters reported Europeans have for the past two decades emphasized low carbon emissions, and automakers created vehicles that met that requirement. Unintended consequences include NOx and particulate matter.

At the same time, diesel cars do cost more to make than gasoline counterparts due to extra emission controls required. The same could be said of EVs and hybrids – they cost more than diesels in fact – but they so far have escaped as serious of implications calling focus now on diesel.

In defense of diesels, the engines can be made clean with sophisticated after treatment including catalytic converters, urea injection, ultra low sulfur diesel and as BMW noted, ICCT found its other cars’ real world emissions to be in compliance.

volkswagen engine

What’s more, the diesel engine is more thermally efficient than the best gasoline engines. It’s a workhorse that drives this society well beyond personal transport.

The Europeans are examining all these factors, and contrast to the U.S. where diesel is a minority fuel for passenger vehicles. Last year just 0.84 percent out of 16.5 million vehicles sold were small diesels.

Further, in the U.S., rules are more stringent, and testing more accurate. Diesel must meet the same standards as gas cars.

These details remain true but popular sentiment and reaction is what it is.

As is true with many human decisions, facts get blurred with feeling, and indignant consumers are feeling lied to.

If more cheating is proven it could swing this momentum further away from diesel even if it could be cleaned up to most people’s satisfaction.

Only time will tell.

EU Regulation Updates

Reaction is not just happening in the general public and media, but officials in the UK, France and Germany up to German Chancellor Angela Merkel have said change must come.

The sentiment now is rules in place are not working, regardless if overt cheating is happening or the tests are too easy to get through.

According to nextgreencar.com, already confirmed is real-driving emissions (RDE) due to be implemented in Europe by 2016. This is where the car is tested on roads with portable emission analysis equipment.

While NOx emission limits for diesel passenger cars have been tightened by an approximate factor of 4 from 1993 to 2009 (Euro 1 to Euro 5), the estimated average NOx emissions in real driving conditions have slightly increased. Source: EU Impact Assessment.

While NOx emission limits for diesel passenger cars have been tightened by an approximate factor of 4 from 1993 to 2009 (Euro 1 to Euro 5), the estimated average NOx emissions in real driving conditions have slightly increased. Source: EU Impact Assessment.

This development happened yesterday when European lawmakers voted to make it so, citing the VW scandal.

Unknown is whether the U.S. will follow this example, but it is being said that real world tests – not a “rolling road” simulation on a dynamometer – are needed to prove what cars actually put out their tailpipe.

UPDATE: 9/25 – EPA Announces On-Road Emissions Tests in Wake Of VW Scandal

 

Even before this, regulations have been making cars cleaner, but real world differs from lab results.

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Nextgreencar reported tests have shown “a real-world drop of 40 percent from 1 g/km NOx at Euro 3 limits in 2000 to 0.6 g/km NOx at Euro 6 in 2014.” Official limits were respectively 0.5 g/km and 0.8 g/km.”

What this means is a shift between official and real-world limits from double the law to 7.5 times the legal limit.

Something needs to done, and will be with real-world testing – and this could be good news to environmentalists wishing to see real results, not the emperor’s new clothes. At the same time, it may be alarming to certain automakers who counted on tests they could more-easily get through.

Not to be instantly gratifying to environmentalists however, there will be a grace period for automakers where new RDE tests are phased in from 2017 onward over 20 months. Under law, EU manufacturers may still flunk real-world driving tests that they passed in the lab with up to twice the emissions allowed under Euro 6 NOx, or 0.08 g/km.

Reportedly by 2019 a second stage in the RDE mandate will allow close to the legal limit 0.8 g/km NOx.

More needs to happen, all this is just being reported within days of the VW news break, and here too, we shall see what comes of early declarations that rules will close loopholes.

Boost for Electrification?

If regulators also remove tax breaks or other shifts happen to make diesel less attractive to consumers and automakers, left standing would be hybrids, plug-in hybrids, all-electric vehicles, and fuel cell vehicles.

Even before the Volkswagen controversy broke out, once-stalwart German proponents of diesels had begun a significant commitment toward plug-in hybrids to meet future regulations.

In Europe there are only about 900,000 hybrids compared to many millions of diesels.

In the U.S. last month, VW TDIs account for around 7,000 sales, or nearly half of the small diesel total or more than that if you exclude 4,000 Ram diesel pickups.

The U.S. in the same month bought 38,000 hybrids, 5,200 EVs, and 3,800 PHEVs. Diesels do represent an alternative-energy choice claiming buyers who might have considered an electrified car.

With 2015 four-cylinder VW diesels pulled from U.S. dealer sales as of Monday and 2016s not EPA certified, the immediate effect in this month’s sales tallies will be clear.

VW will be made to clean up the mess and it’s believed sales will resume. For now, it’s unclear how VW may remedy the affected TDIs. Analyst Alan Baum observed the question is whether the solution will be with software or hardware.

“There aren’t that many cars so it shouldn’t be that long of a process to fix,” Baum said. “But the easy fix will be either to hurt performance and/or fuel economy which will reduce the reason to buy the product. The short-term answer is to reduce price.”

ChevyBoltEVCamo02-668x409

Consumers may opt to ignore the recall, and might if they think it will hurt mpg or performance. Unknown is whether authorities would step up enforcement for the half million out-of-compliance VWs now on the streets. They could do this by withholding next-year registration, or by other means.

If the fix reduces performance, economy, or resale value this would be worse than a blast of untreated diesel exhaust in the face to buyers stung by VW’s deception.

SEE ALSO: What’s So Bad About the Extra NOx VWs Emitted?

Compounding the problem is VW’s subterfuge not only has economic implications, but most take emissions laws seriously. NOx threatens human health and the environment and has been linked to a number of serious conditions up to premature death.

The stigma may not easily be outlived though Baum does not expect it will bankrupt VW which is carried by Audi and Porsche.

Further, Volkswagen has launched into damage control mode. Its CEO stepped down yesterday just days after the news broke, and more terminations are being reported.

Still threatening to widen, the billowing plume of a diesel exhaust scandal is sobering and most unfortunate, but a silver lining may be found in this cloud as well – at least for some.

Depending on how it goes for the diesel market, electrified vehicles may be inadvertent beneficiaries to some extent.