Diesel Sales in Europe Likely to Keep Falling

Sales of diesel-powered cars in the EU peaked at 56% of the market in 2011 and have slowly declined to about 51% this year, according to industry group ACEA.

The extraordinary growth in diesels in Europe over the past 20 years was driven by government policies promoting the engines as an effective way to lower carbon dioxide emissions, the Financial Times notes. It says diesels emit an average 20% less CO₂ than their gasoline equivalents.

But Volkswagen AG’s diesel emission scandal has drawn sharp regulatory focus on harmful nitrogen oxide and particulate emissions from diesels. Says Ursula Pachl, deputy director-general of consumer group BEUC, “There is no trust any more in the claim that diesels are cleaner.”

Controlling NOx and soot more closely will drive up the cost of diesels and destroy the market for small cars powered by diesels smaller than 2.0 liters, opines Fiat Chrysler Automobiles CEO Sergio Marchionne.

Meanwhile, government regulators are abruptly shifting their focus to gasoline and electric powertrains. By 2025, diesel’s share of the European market will shrink to about 38%, according to market analysts IHS Automotive.

IHS says diesel sales aren’t likely to shrink even faster because such engines will remain critical in helping carmakers meet the EU’s CO₂ goals over the next several years. Longer term, carmakers recognize they have little choice but to shift to more electrified powertrains as the most promising alternative to both diesel and gasoline options—even though emission and fuel economy standards are all but certain to increase the cost of all three choices, FT says.