The Fuel That Wouldn’t Die

Diesel vehicles account for only a small fraction of the dealership’s overall sales—maybe a dozen out of 150 or 200 sales a month, Boehme says. But at his lot and nationally, diesel is showing startling resilience among consumers. So much so that in the last couple of years, manufacturers have introduced or announced diesel versions of Jaguar’s Land Rover, the Ford Transit Connect minivan, the Chevy Silverado, the Jeep Wrangler, and the Hyundai Santa Fe SUV.

Just a few years ago, diesel seemed headed for extinction. Volkswagen, which dominated the market with 70 percent of U.S. diesel-vehicle sales, abruptly stopped selling them after admitting in 2016 to years of cheating on federal emissions tests. The company’s Audi and Porsche brands stopped selling diesel, too. Same with Mercedes-Benz. And all the hoopla over electric and hybrid vehicles suggested there would soon be no place for gas engines, let alone diesel. Around the world, big cities such as Mexico City, Madrid, Paris, and Athens had promised to ban diesel vehicles by 2025 over concerns about air pollution.

But U.S. consumers have kept asking for diesel vehicles. In 2014, 2.8 percent of the vehicles sold in the United States were diesel. In the first 10 months of 2018, that figure remained 2.8 percent—even as the number of vehicles sold annually has risen—according to the National Automobile Dealers Association. Sales of electric cars and hybrids account for about 3 percent of the market.

There are a number of reasons why drivers might prefer diesel. Although diesel vehicles tend to cost more than their gas counterparts, they also tend to be more powerful and get better mileage. Historically low fuel prices have propelled drivers to buy larger trucks and SUVs in record numbers—about two-thirds of the vehicles sold in the United States last year were trucks or SUVs—and the diesel option makes more sense in trucks than sedans.

Diesel boosters will tell you it is the dependable and fuel-efficient option. “We are not a one-size-fits-all country—we never have been—and people are going to value choice in their vehicle type and in their powertrain,” says Allen Schaeffer, executive director of the Diesel Technology Forum, a trade group. “People still see the inherent value in a technology that is proven to be fuel-efficient and that doesn’t force them to compromise on anything. Maybe you don’t hear about that from the popular media, because people would rather write about electric cars.”

Diesel is a more efficient fuel than gasoline and in that sense can seem more environmentally friendly. But diesel engines burn hotter, which means their exhaust tends to contain more of the particulates and gases that contribute to air pollution. “Diesel presents a tradeoff: It’s more fuel efficient, so it emits less carbon dioxide, but it produces more nitrogen pollution,” says Daniel Cohan, an atmospheric scientist at Rice University.

In the 1990s, car companies like Volkswagen and BMW hyped diesel as the environmentally friendly alternative to gas—one that contributed less to global warming. Some European governments even took the step of incentivizing the purchase of diesels to help meet their commitments to reduce carbon dioxide. Britain linked its vehicle taxes to carbon-dioxide emissions, which had the effect of favoring diesel. European taxes on diesel fuel tended to be less than on gas, too. The incentives worked: The percentage of diesel vehicles in Europe skyrocketed from 3 percent in the 1990s to 37 percent in 2015. Some countries have even more: In France, diesels account for about 70 percent of vehicles on the road. A recent paper published by Yale’s School of Forestry & Environmental Studies described Europe’s pro-diesel incentives as a “well-intentioned response to climate change.”

Today, though, the winds of environmental virtue are blowing a different direction. European leaders have largely abandoned diesel over concerns about air pollution. They are touting electric cars and hybrids. Hamburg, Germany, banned older diesel vehicles on certain city streets this year, and other cities are mulling similar restrictions. The European Commission took France, Germany, and a handful of other countries to court over their air pollution. To fight climate change, some countries have raised fuel taxes to make both gas and diesel engines less appealing—one of the sources of outrage fueling the recent protests in France. The European commissioner for industrial policy, Elzbieta Bienkowska, said in May that diesel is a “technology of the past” and that “diesel cars are finished.”

For cars, even in the United States, that might well be true. It is challenging for the smallest of vehicles to meet emissions standards and remain affordable. Yet with trucks, the diesel outlook is rosier. About one of every seven pickups sold in the United States is diesel. And for heavy-duty construction equipment and commercial trucks, diesel remains the best choice. It will be a long time before electric vehicles will have the needed power or range. Tesla has said it is developing a semi-truck, but analysts are skeptical. In a dig, a Daimler executive said this year that a Tesla electric tractor-trailer still must obey the “laws of physics.” London market-research firm IHS Markit predicts that even by 2040, 80 percent of commercial truck fleets worldwide will still have diesel engines.

Michelle Krebs, executive analyst with Autotrader, says that for cars, diesel is “pretty much dead.” But it continues to hold value in bigger vehicles, she adds: “It’s still an important offering in the pickup truck line for certain kinds of buyers. For work trucks, for trucks used to pull trailers and haul larger loads, there is a place for them.”