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Five Reasons Small Diesels Won't Dominate the U.S. Car Market

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2010 Audi A3 TDI

2010 Audi A3 TDI

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There's nothing like a rant from an old friend to focus the mind.

We recently read a profanity-laced note from a high school pal excoriating all the major automakers for not selling small, high-mileage diesel cars and trucks in the U.S.

We referred him to an article about why we can't buy small European diesel cars in the States. After further discussion, it made sense to turn it into a list. So, here are our five reasons why automakers are reluctant to bring diesel-engined cars and light trucks into the U.S. market.

As we said:

Before you start flaming us, understand: These are the reasons [carmakers] give for not offering small diesels. If you want to weigh in, the comments box is below. But don't shoot the messenger, OK?

2010 Volkswagen Golf TDI

2010 Volkswagen Golf TDI

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(1) Diesel engines cost more to build

Diesels are about 15 percent more expensive for carmakers to build than gasoline enginee of equal output. That drives up the cost of the base vehicle.

(2) Emissions treatment for diesels is complex and expensive

The U.S. has the toughest auto emissions standards in the world, with much more aggressive limits on particulate matter (aka "soot") than European nations. That requires expensive aftertreatment for diesel engines, like the Mercedes-Benz Bluetec system.

The Mercedes ML350 BlueTec replaces the current ML320 for 2010

The Mercedes ML350 BlueTec replaces the current ML320 for 2010

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Together, the first two reasons make diesel cars a lot pricier in the States than gasoline cars. It's worth nothing that Europeans pay about 20 percent more for their cars--with less standard equipment and lesser performance--than we do in North America.

That's why Ford doesn't offer a small diesel in the Transit Connect, even though fleet operators want that option. With aftertreatment, a diesel Transit Connect could rise from about $24,000 to $28,000, or more, which no one is likely to pay for a compact front-wheel-drive commerical van.

(3) The payback on diesels is hard to calculate

As Barbie famously said, "Math is hard."

Most car buyers consider and buy "green" cars to save money. While diesels get better fuel economy, they also cost more. And the fuel often costs more. So you have to calculate over the lifetime of the car whether you'll save money. Which requires math. Which is hard.

Europeans, on the other hand, have enjoyed cheaper diesel fuel for decades, because tax policy has largely kept it that way.

Barbie Ford Mustang

Barbie Ford Mustang

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Worse yet, retail car buyers overweight purchase price (because we know what we can afford today) and underweight total cost of ownership (because we think the car won't break, we'll keep it fewer years than we will, etc.).

(4) Diesel fuel isn't available everywhere

Only about half of all U.S. filling stations offer diesel fuel at all. It's common in rural areas, for farm equipment, and in cities, which have lots of delivery fleets. It's less common in residential areas of suburban sprawl.

Of stations with diesel, only about half offer it on the same pump islands as gasoline. While drivers may be willing to fill up with diesel, they may be less happy about doing it out back with the semis.

(5) Buyers think diesels are dirty and costly

Diesels are no longer dirty. But ask an average car buyer to picture a vehicle with a diesel engine, and they're as likely to come up with a garbage truck or a transit bus as a 2011 Audi A3 TDI--which was, by the way, last year's Green Car of the Year.

Consumers clearly know clean diesels are pricey. And to some extent, the market backs them up. Aside from long-time diesel stalwart Volkswagen, what makers sell clean diesels these days?

Mercedes-Benz, BMW, and Audi, which are hardly known as mass-market, affordable brands.

++++++

The news isn't all bad. More diesels will slowly enter the market. In late September, in fact, Tom Stephens--he's a vice chairman of General Motors--said that GM would offer an unspecified passenger vehicle with a diesel engine in the U.S.

In the end, as we wrote to our high-school friend, it's NOT an evil plot on the part of automakers that small diesels aren't widely available. Despite the many avid diesel fans out there, if automakers thought they could sell those vehicles--at a profit, please note--they'd do it in a heartbeat.

Truly.

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Comments (31)
  1. Another reason why small diesels might not dominate in the USA is they might die here in Europe sometime soon - http://www.telegraph.co.uk/motoring/green-motoring/7166444/Is-diesel-dead.html
     
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  2. Not sure why we bother with diesels in places like America and Australia where they have large natural gas reserves. Why not use natural gas instead so that there is less reliance on foreign oil. Natural gas is a good interim solution. The long term solution will be Electric Vehicles.
     
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  3. I test drove an Audi A3 TDI with DSG; really nice drive; loads of torque but when I asked the dealer how many they'd sold since they came out a few months previous the answer was "None". What about the Q7 TDI? "Great car, really benefits from the low end torque from the 3.0TDI... Haven't sold any.".
    I'd never choose a limp-wristed 3.2 petrol over a 3.0TDI... why would you?
     
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  4. Stated in your article on "Small Diesels Won't Dominate the U.S. Car Market" you say, quote:
    "Europeans, on the other hand, have enjoyed cheaper diesel fuel for decades, because tax policy has largely kept it that way."
    The above statement is incorrect. Great Briton’s have been charged substantially more for diesel than gasoline for many years! Presently diesel is about a 3% premium in price to gasoline in the UK, but it has been up to 10% higher in price earlier this year.
    Decades ago diesel was introduced into the UK at a cheaper price. However, for many years now, as diesel owners are well aware, diesel is the most expensive fuel. The advantages these diesel owners weigh in on is their better mileage consumption per gallon.
    Please take care when printing statements that have not been carefully checked against the facts.
    Shelley
     
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  5. item 1:diesel engines are not known for their "equal output" but for their torque. thus a diesel with 120hp delivers 250 torque and the feel of 250 horse power.
    item 2: if it's sooo complicated why does VW sell every TDI they make in the US? are they selling at a loss? I doubt it.
    item 3:hard to calculate? better mileage, less maintenance since don't use plugs,wires,cap,rotor or over plug coil. Most diesels last well over 300000 miles. many diesels are considered broken in at 250000 miles.
    item 4:diesel may be hard to find in many "city" pumps but so are gas stations. in many cities due to safety regulations and other governmental restrictions finding a gas station is very hard.
    item 5: nothing a little positive marketing money spent showing the how clean diesel emissions are and what great mileage they get. maybe instead of sticker showing 41 MPG how about one listing 640 miles out of a 16 gallon tank.
    as for the transit connect. perhaps FORD should give fleet buyers the option of a diesel engine that will offer 40+ mpg over the gasoline's 25 mpg hwy and let the customer decide which vehicle he would rather spend his money purchasing.
     
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  6. When it comes to comparable model sales, diesel are actually doing quite well. The Diesel Driver has been analyzing sales of "comparable models" (i.e. a BMW 335d sedan versus the BMW 335i sedan or the Audi A3 TDI versus the Audi A3 gasser) and the take rate is approx. 33%.
    See http://www.thedieseldriver.com/2010/10/diesel-economics-201/
    Although I don't know if this is completely authoritative, the take rate for hybrids cars versus the comparable model is in single digits.
     
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  7. Yet when the Suburbans, Light Trucks and Explorers were so popular noone ever bothered to put a diesel in one. I did know a few people with diesel C/K Blazers in the early 80s. My question is why more light trucks are unavailable with diesels, and to get a diesel in a pickup buyers have to step up to heavy duty trucks. A pickup can easily be optioned up to $50K, and Escalades can cost $80K. No diesels in light trucks, not even in Texas, with all the demand. Isuzu did, in a compact truck and some medium size car, but Isuzu had many other problems.
     
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  8. I recently returned from a fishing trip to Ontario where I noticed two things about diesel: 1. Almost every truck was diesel powered, and 2. Diesel fuel was 10 to 18 center per liter less than gas. That left me with the opinion that if people in the U.S. used diesel to the same extent as Canadians diesel would be a lot cheaper through economies of scale.
     
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  9. If the big three had given buyers the choice of a diesel engine five years ago they would have not run into the ditch like they did. They build these engines overseas and even in this country for shipment overseas. Chrysler builds Caliber diesels in the USA and ships them overseas. Five years ago in front of Congress, Padilla of Ford boasted that they would be bringing a fuel efficient diesel from Europe to the USA. Well, we are still waiting for it. As Ford introduces us to a 40 mpg highway Fiesta, the same one in Europe with a diesel gets 50-55 mpg. Certification cost could be spread over the Fiesta, Escort, C-Max and Transit Connection. I will never buy another one of the big three's non-competitive products until they stop playing us! I only wish that VW would offer the TDI engine across VW and Audi lines. Diesel fuel is widely available around big cities with highways and even in rural areas since trucks and farm equipment use it. The more diesel engines you build the less they will cost. Plus the big three could enter into a diesel engine supply agreement or partnership with VW. The payback period for a diesel engine is short and the resale value is much much better than a gasser. I can't wait until the Mazda and BMW bring new diesels by 2012 to the USA. Also, I hope VW brings the Polo with its 50-55 mpg highway diesel so that it can run the competition, including Prius, into the ditch.
     
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  10. The Euro Fiesta with 1.6L diesel with a DPF is rated at 4.6/3.2/3.7 l/100km city, highway, combined. That works out, in American MPG to 52/73.5/63.5. I would sell my soul for a car that gets 73 MPG on the highway.
    I drive a 2010 Golf diesel with a 6 speed manual, and got 55.3 this fall on my annual road trip.
     
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  11. In 1981 I drove a '80 diesel Rabbit from WIchita Falls, TX to New Mexico (over 500 miles) and had 51 mpg. In 2009 I drove a 2005 VW diesel SW r/t San Antonio to Houston (just over 600 miles) and got 61 or 62 mpg.
    In my travels in and about the D.C. area, KY and PA plus all fof the south, I have NEVER had to hunt for a regular fuel station that did not have diesel while deiving a Mercedes 300D.
    Needless to say, I most likely will stay with diesel for another twenty years.
     
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  12. Diesel fuel fluctuates all over the place in California. It was cheaper than regular grade gasoline for a brief time but is now back to being more expensive than premium grade gasoline again. I was thinking about the Golf TDi because of the range per tankful meant I could fill up just once a week with no worries, instead of twice a week with my MX-5, but the price of the fuel is just too much. I wish California would either go back to the same fuel mix as the rest of the country or vice-versa, because we pay much more than anyone else for fuel.
     
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  13. Small fuel-efficient diesel engines found in Europe are popular, peppy, quiet, and don't emit any more noxious smell than gasoline cars. According to Edmonds.com, diesels in the USA are offered by Audi, BMW, Mercedes and VW. The only American diesel offerings are found in full-size pickup trucks and commercial vans. This isn't 1960 USA where you had to refuel your diesel at the truck stop. And the European diesels are quiet - and affordable ($22,995 for a Jetta diesel getting 30mpg city to 42mpg hwy). Chrysler Jeep Dodge offers numerous diesel engines (some are Mercedes diesel engines and some are VW diesels) - but they only offer these for export. A PT Cruiser 2.2L TD was far superior to drive than any of the gas engines. Fiat has 1.4L diesels with 120 - 135hp and all the pep you need in normal driving. So what do we need to do? Our diesel emissions regulations are too restrictive. The EU regulations are perfectly adequate for clean diesel emissions - we should adopt them. Period. And let the free market decide. Import duty: we pay 2.5% import tax on every imported car, whereas it's 10% in the EU, 30% in Russia, and up to 65% in Iceland. We have room to match the 10% import duty of the EU. Smaller, more economical vehicles are available today at reasonable prices. The American manufacturers can do it, they just need to educate the American consumer that diesel is a viable alternative and will save us money now and in the future.
     
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  14. Out of the five reasons given, only the first two, which is really only one reason (cost), is a valid point.
    3. Figuring payback is not that hard. I paid $1100 more for my '06 Jetta. I get 15 more miles per gallon that an identical driver in an identical gas Jetta. Diesel fuel prices have fluctuated between $.10 and $.75 more per gallon. One can figure the average premium to be $.35. This average has not changed in ten years when looking at each, two-year average. Most people will own their cars at least four years.
    4. If you're getting 600-800 miles per tank, I think you can find a diesel pump, and it's kind of cool filling up at a semi pump though it is rare to find that kind of set up. I actually look for those stations.
    5. The only consumers that still think diesels are dirty have been living on the space station or are interested only in gas guzzlers anyway.
    Again, the only drawback is cost, but it's a big road block with US/Canadian emission laws which favor the pollutants associated with gas cars.
     
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  15. Personally, I would like to know more about the servicing required for modern diesels. I read an article suggesting that the particle traps were a maintenance problem for people in London. I also have a friend that walked away from a modern diesel pickup truck (buying a gasoline one instead) after summing up the cost of maintenance.
    I am keeping an open mind about diesel, but I still have my doubts.
    John C. Briggs
     
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  16. Are the new high pressure fuel injected and turbo diesels less reliable than the non turbo engines of yesterday?
    The ones that need urea added also incur additional driving costs. Not sure if it's worth it.
    Would consider an AWD diesel-hybrid. Would be the best of both worlds.
     
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  17. We have owned 3 diesels...Mercedes 330D, Datsun Sentra, Datsun pickup. Each was perfect for its assigned tasks. 300D with over 500,000 miles was given to a neighbor who kept driving it every day as a status symbol. Try finding a 2011 VW Golf 4dr auto TDI anywhere in the country or a dealer offering a deal.
     
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  18. Diesel fuel has a higher ignition point and a much lower vapor pressure and is considered to deliver just 2% of the fire hazard of an equal volume of gasoline.
     
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  19. Toledo Jeep manufactures a Jeep Wrangler with a 2.8L I4 crd engine (for foreign markets) which provides greater torque and better mileage than the current V6 gasoline engines in the not-so-green wranglers sold in the U.S. ???
     
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  20. I am a mechanic for volvo in australia
    we brought volvos D5254T10 in XC90 first and now other variants/models. These car are the most relible cars we see. there servicing cost is the cheapest because only the oil and filter get changed, fuel and air every 90000km. we have sold more and more year on end and nearly all repeat customers buy another one. Our desiel price on average is 10-15% higher than gas.
     
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  21. A 2011 VW Jetta Sportwagen TDI DSG costs $2350 more than a comparably equipped gasser - a bit less if one could spec the gasser with the DSG tranny rather than the regular auto tranny. I don't see why a Transit Connect diesel would cost $4000 more than the gasser. As others pointed out, the diesel cars that are available in the US sell reasonably well relative to their gasoline counterparts. So I think the 'diesels cost too much' argument is a little off the mark.
    Another thing that is holding back diesel sales in the US is the EPA's overly low estimates for diesel car fuel economy. Per fueleconomy.gov, the average Prius driver gets 1 mpg less than the EPA estimates, but the average VW JSW TDI driver beats EPA estimates by about 5 mpg.
     
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  22. correction... if more people demanded diesel fuel, you'd find more at filling stations. i find it hard to believe the last comment that people think they are dirty?? wouldn't that apply to the diesels being offered by volkswagon, Audi , Mercedes and BMW?? come on. And, "The math is too hard"... Who does this math? I'll tell you. nobody. We buy a car based on the sticker information and marketing campaigns ... look at Volkswagon, BMW, Audi and Mercedes. There are other reasons... I can buy the base cost reason, but I doubt they'd fare any worse than Volkswagon. In other words: LAME
     
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  23. @Laura: To your last point, indeed, we covered the higher-than-EPA-estimated mileage achieved by many Jetta TDI drivers here:
    http://www.greencarreports.com/blog/1019256_volkswagen-jetta-tdi-much-more-mileage-than-epa-admits
     
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  24. Volkswagen says 22% of Jetta sales are diesels and the Jetta is one of the top ten best-selling cars in the United States.

    A good way to justify diesel is to compare it to hybrids. Diesel costs less; is less complicated and will keep going long after the hybrid needs a new battery pack. The diesel engine itself is comparatively low maintenance; some of the emissions systems need replenishment of certain fluids and filters.

    The problem is not just consumer ignorance, our hybrid-happy federal government gives diesels short shrift in spite of diesel's demonstrated advantages. Among these are no additional strain on the national power grid and no need to install charging stations.
     
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  25. After having spent 2 weeks in Germany last summer driving a BMW 320d wagon, I am sold on the technology. 90mph while achieving 36mpg!

    Ford Explorer with a 4cyl. gas turbo? No thanks. Hey Ford, how about a 3 liter turbo diesel?
     
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  26. Why is it possible to rent a diesel nissan navara 4x4 in costa rica that is made in new smyrna tennesee, and can't buy one in the USA
     
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  27. Ford Motor company is making me buy another vehicle, because they don't have a v-6 or diesel engine in the Transit Connect Van. And i have worked for this company for 40--years.
     
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  28. I am so sick and tired of hearing comments about the diesel price, yes diesel in the US does cost a little more. Now is it so hard to figure out what it really cost? My wife drives a Golf TDI that gets 50 miles to the gallon doing about an average speed of almost eighty miles per hour with the AC. So she can drive 600 miles on 12 gallons of diesel at, lets say $4.00 a gallon. This cost her $48.00 to fill up. If she drove a gas guzzler and only got 24 miles to the gallon at say $3.75 per gallon and went the same 600 miles it would cost her $90.00 to fill back up. So I ask is the diesel really more expensive. By the way this is by far the best vehicle that we have ever owned, 100,000 miles and not the first problem yet.
     
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  29. Funny - costs go down as more people catch on, and price is definitely a factor in deciding on a reliable family car, regardless, efficiency today is an issue when wars are fought over oil and planetary carbon buildup moves toward crisis levels. The Turbo Diesel Injection engine is a step in the right direction all the way around despite the nay-sayers.
     
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  30. Not very practical if you drive less than 300,000 miles a year. Plus they are very doggy unlike gasoline engines with much more horsepower.
     
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  31. Jon - what are you talking about? I've driven a 2006 manual Jetta tdi that was plenty fast, even at 1200 rpm. What diesels have you driven that you'd consider doggy? Also, even only 10K miles a year is enough to make them practical.
     
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