VW Scandal Clouds Prospects for Other Diesel Makers at Geneva Motor Show
|
Version 0 of 1. GENEVA — Thanks a lot, Volkswagen. That is the sarcastic undercurrent at the annual motor show here, as executives survey the damage that Volkswagen’s diesel cheating scandal has inflicted on the industry — particularly on its plans to keep pace with stricter emissions regulations. Although diesel generates more harmful nitrogen oxide pollution than does gasoline, diesel engines produce less carbon dioxide, a cause of global warming. Carmakers saw diesel — which accounts for more than half of the vehicles sold in Europe — as essential to meeting the Continent’s tougher carbon dioxide quotas. “We cannot fulfill European CO2 standards without diesel,” Harald Krüger, the chief executive of BMW, said in an interview at the Geneva International Motor Show. But automakers’ plans have been upended by Volkswagen’s admission in September that it programmed 11 million vehicles to cheat in order to pass tailpipe emissions exams. The scandal called attention to lax European Union testing procedures, and sped plans to scrutinize tailpipe emissions under more rigorous road conditions. At present, cars in the European Union are tested in labs. The scandal, which prompted the company to put on a more demure exhibition here than usual, has also unsettled regulatory officials and made it more difficult to get approval for new vehicles, Dieter Zetsche, the chief executive of Daimler, said in Geneva. “We see situations where you get more questions and things are somewhat slowed down,” he said during a meeting with reporters. Mr. Zetsche declined to say what countries he was referring to. Carmakers say they have the technology to allow their vehicles to pass emissions tests under a broader range of driving conditions. But cars with diesel engines will become more costly as manufacturers add extra hardware to neutralize nitrogen oxides, which are linked to serious lung ailments. European limits on nitrogen oxides, which were not only less strict but also less strictly enforced than in the United States, were set to become more stringent even before the Volkswagen cheating became known. The problem for many carmakers is that better emissions equipment is not a selling point for most customers. Buyers may just see the extra cost, and perhaps decide to buy a gasoline car instead. “Diesel will have to be equipped with even more technology,” said Peter Schwarzenbauer, a member of the BMW management board responsible for sales. “That is all technologically conceivable, but someone has to pay for it.” If carmakers sell fewer diesels, they will have to find other ways to reduce carbon dioxide emissions. European regulations require carmakers to cut those emissions, averaged among all the vehicles they sell, 40 percent by 2021 compared to 2007 levels. Plug-in hybrids and all-electric vehicles will help, but so far consumer demand is slack. “We have electric vehicles today,” Barb J. Samardzich, chief operating officer for Ford of Europe, said during a meeting with journalists. “What we don’t have is consumer pull.” She and other auto executives said that governments should provide incentives to get customers to buy battery-powered cars. European policy has long favored diesel because of its superior fuel economy. Diesel engines extract more energy from a liter of fuel than a gasoline engine extracts from the same quantity. A car that uses fuel more efficiently also produces less carbon dioxide. In Germany, diesel fuel costs about 20 euro cents less per liter than gasoline because of lower taxes. As a result, diesel has been particularly attractive for buyers of larger luxury cars that consume more fuel. About three-quarters of the cars sold in Europe by BMW and Audi, a Volkswagen brand, are diesels. “The European industry is dangerously dependent on diesel,” Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen in Germany, wrote in a study published last week. By contrast, in the United States, federal taxes on diesel are higher than for gasoline. The higher tax has been seen as a way of charging the trucking industry, heavy users of diesel, for the extra burden they put on highways. The price of diesel helps explain why diesel vehicles that run on it account for a tiny percentage of the cars that BMW and Mercedes-Benz sell in America; the scandal is unlikely to affect their sales very much in the United States. The same cannot be said of Volkswagen. The company aggressively marketed diesel in the United States and other countries, targeting the same environmentally conscious buyers who might otherwise have bought a hybrid like a Toyota Prius. That strategy collapsed after Volkswagen acknowledged that it had programmed cars to recognize when they were being tested and to screen out more emissions. At other times, the cars’ nitrogen oxide emissions were many times higher than is allowed. The carmaker said on Wednesday that the former chief executive was given a memo in May 2014 that contained information about irregularities in the emissions of its diesel cars, well over a year before Volkswagen made its public admission. The company is now struggling to reach agreement with United States and California officials on how to fix about 600,000 vehicles under its Volkswagen, Audi and Porsche brands that are on the road and still emitting illegal levels of nitrogen oxides. A United States District Court judge in San Francisco, who is overseeing class-action suits against Volkswagen, has given the company until March 24 to provide a definite answer on how it would bring the cars into compliance. In a reflection of its battered public image, Volkswagen made a show of humility in Geneva this year. It did not stage one of the elaborate presentations that typically precede the opening of a major car show, and for which Volkswagen had been known. In past years, the Volkswagen extravaganzas have featured laser light shows, a parade of new car models, and surprise appearances by pop stars like Pink or the Pet Shop Boys. This year, Volkswagen had a more modest reception in a dining space adjacent to the exhibition hall. The only people on stage were Matthias Müller, the chief executive, and Johann Jungwirth, a former Apple executive whom Volkswagen hired in November to oversee its digital strategy. Mr. Jungwirth described a rosy future of self-driving, emissions-free electric cars, but whether that future will arrive soon enough to fill the gap left by diesel is questionable. Volkswagen and other automakers say that, by the end of the decade, battery-powered cars will be available that can travel about 300 miles on a single charge, and will be able to recharge in 15 or 20 minutes at high-voltage charging stations. Porsche has shown a prototype of an electric sports sedan, the Mission E, that it plans to introduce in 2020. Although the cost of batteries is falling, electric vehicles will still be substantially more expensive than comparable diesel cars for some time to come, and carmakers say they cannot sell large numbers of them without government help. “We know that the cost of batteries will go down in the future,” Thierry Koskas, executive vice president for sales at the French carmaker Renault, said in an interview. “But we are not today in a situation where you can match the total cost of ownership of diesel without incentives. We need incentives.” Electric vehicles, which account for a sliver of the market so far, could attract more buyers as people factor in other advantages. Besides producing no tailpipe emissions, electric cars are quieter than most conventional vehicles, have peppy acceleration and require low maintenance. They do not need oil changes. “In the years to come, there is likely to be a break even with these two technologies,” Hakan Samuelsson, chief executive of the Swedish carmaker Volvo, said in an interview. “But there is no possibility that we can overnight just say, ‘OK, we don’t need diesel.’ That will not be possible.” |