Volvo May Halt Further Diesel Development

Volvo Car Corp. isn’t likely to develop next-generation diesels to succeed its current lineup, CEO Hakan Samuelsson tells Germany’s Frankfurter Allgemeine Zeitung.

He told the newspaper that the company’s current thinking is to halt further work. But a spokesperson later told Reuters that no decision has been made.

Samuelsson says Volvo will continue to refine its current diesel architecture and expects to continue producing diesels until about 2023. But he says the rising cost of meeting tougher pollution standards will make diesels too expensive to justify further improvement.

Carmakers in Europe are required by the EU to cut their fleet average emissions of carbon dioxide from 130 grams per kilometer to 95 g/km by 2021. Diesels have helped keep manufacturers on track to meet that target. But diesels require increasingly complex technology to satisfy tightening limits on nitrogen oxides. Volkswagen AG’s emission cheating scandal and subsequent concerns about other manufacturers center on NOx emissions.

Samuelsson says that financial reality has pushed Volvo to redirect more product development spending to hybrid and all-electric powertrains. Volvo plans to introduce its first all-electric model in 2019.