Recent events in the automotive industry have heightened the worry around diesel being a viable option for automotive powertrains. Roland Berger Strategy Consultants has recently compiled a paper on the impact of the diesel controversy on OEMs and suppliers named 'Diesel controversy-Temporary shock or paradigm shift in powertrain?'. Excerpts of the paper...
European OEMs have utilised the fuel-efficient diesel powertrain as a key lever to reduce corporate fleet CO2 emissions, especially in the European Union (EU) due to 2020/21 CO2 vehicle emission targets. These targets are basically impossible to reach without diesel. Therefore it is expected that diesel will remain a key pillar in OEMs' powertrain strategies, especially in Europe.
The current debate about diesel will, however, further drive innovations in combustion and after-treatment of diesel due to increasing regulatory requirements and standards, and will enforce test cycle implementation aiming to reflect Real Driving Emissions (RDE).
In order to fulfill RDE regulations, diesel will become cleaner (with emission levels similar to gasoline engines), but also more expensive.
The resulting cost increase will accelerate the substitution process from diesel to smaller gasoline engines, especially in lower vehicle segments. Diesel will still remain dominant in the upper vehicle segments but total diesel share in Europe will decline in the
OEMs therefore have to further accelerate alternative powertrain solutions. Suppliers have the opportunity to implement innovative solutions for the further control of diesel RDE, and should also step up their preparations for alternative powertrains.
In the global core passenger car markets, the diesel powertrain is mainly a European phenomenon with more than 50 per cent of new sales.
CO2 emissions/fuel consumption
Emission regulations increase pressure on automotive OEMs to improve CO2 emissions, fuel efficiency and exhaust gas emissions. Diesel powertrain utilises its better fuel efficiency compared to gasoline especially in the upper vehicle segments.
Diesel efficiency improvements will be the main lever to reduce fleet emissions for European OEMs to reach 95 g/km target in 2020/2021.
Toxic exhaust gas emissions
As of today, the road transport sector is the largest source of NOx emissions in Europe - diesel is a major contributor.
The diesel's NOx and PM limits have approached the level of gasoline but also lead to increases in emission control costs. Nevertheless, the discrepancy between real emissions and EU limits for diesel cars has substantially increased since 2000.
The 2025 outlook for diesel expects decrease of diesel share in nearly all major automotive markets. Worldwide outlook and drivers for the use of diesel in passenger cars is as follows:
Three scenarios on future of diesel possible in Europe 2030 - "Most likely" is decrease of diesel with shift toward upper car segments. Diesel powertrain still expected to hold dominant position in upper passenger car segments despite decline in diesel share by 2030.
Diesel essential for CO2 reduction by OEMs but higher technology demand to meet regulations - Potential benefits for supplier industry.
Article courtesy: Roland Berger Strategy Consultants.