November 27, 2017

Are Diesel Cars Facing Terminal Decline?

Diesel In Decline As New Car Buyers Disappear

Sales of diesel cars again fell in October, continuing a trend that has seen diesel fall out of favour as a result of the controversy surrounding emissions ridden with dangerous nitrogen oxides (NOx) and manipulating software used by vehicle manufacturers.

At the same time, the Government has clearly signalled its electric vehicle intentions by announcing that all new diesel and petrol cars will be outlawed by 2040 – in 23 years’ time.

What Are The Latest Diesel Sales Figures?

Last month diesel sales fell significantly – dropping by 30% year-on-year, from 88,888 in October 2016 to just 62,349 this October.

Sales of diesels so far this year are down almost 15% at 946,537 compared with 1,112,655 at the same point in 2016.

An analysis of the year-to-date market shares of different fuel types shows that petrol currently stands at 52.8% (up 2.9%), diesel at 42.5% (down 14.9%) and Alternative Fuel Vehicles (AVFs), such as hybrids and electric vehicles, up 34.8% to a still modest 4.6%.

The picture is similar across Europe. For the first time since 2009, petrol registrations have overtaken those for diesel, says European manufacturers’ association, ACEA.

In the first half of 2017, European sales of diesels fell by 152,000 new cars, representing just 46.3% of all new car registrations compared to 50.2% for the first half of 2016.

Such results are backed up by recent research amongst drivers carried out by CLM. This revealed that 68% of drivers were unlikely to choose a diesel for their next vehicle, with 32% stating that they would definitely not choose one.

To learn more about Alternative Fuel Vehicles click here to visit our dedicated AFV page.

Why The Sharp Decline In Diesel?

While some of the change may be down to drivers switching to new, more efficient petrol and AFV technologies, this is unlikely to be the whole picture.

For well over a decade, the CO2-based tax company car tax system in the UK has been encouraging the take-up of diesel cars and this has significantly reduced the levels of CO2 produced by the transport sector.

However, it has also increased the levels of NOx produced, particularly in towns and cities, as diesels produce significantly more of this type of emission than petrol equivalents.

An EU review earlier this year revealed multiple failings by the UK in applying environmental law and has escalated its action against Britain for breaching air pollution limits.

Britain has been in breach of EU nitrogen dioxide (NO2) limits since 2010, with London overshooting its annual air pollution limit for the whole of 2017 in just the first five days.

Air pollution has been linked to an estimated 40,000 premature deaths a year and 37 out of 43 areas across the UK are exceeding legal EU limits of the key pollutant, nitrogen dioxide, much of which comes from diesel engines.

Clean Air Zones

The publication in May 2017 of the Clean Air Zone Framework, which defines the principles local authorities should follow in setting up such zones, is an to attempt to redress this.

This, and significant media coverage, has also increased consumer concern over potential tax implications or pollution-charging for diesel vehicles in certain UK towns and cities.

Drivers of older, more polluting vehicles now have to pay almost twice as much to drive in central London, following the recent introduction of Mayor Sadiq Khan’s £10 T-Charge – the first of a number of measures aimed at cleaning up London’s air.

The new T-Charge zone, which applies to diesel and petrol vehicles registered before 2006, covers the same area as the existing congestion charge zone, increasing the cost to £21.50 for those affected.

london emissions t charge

The new measure is the latest attempt by Mayor Khan to improve air quality in the capital.

Next in line is London’s Ultra Low Emission Zone (ULEZ), the T-Charge’s replacement, and the Mayor has subsequently announced that its introduction is to take effect from 8 April, 2019 – 17 months earlier than originally planned.

Vehicles will need to be a minimum of Euro 6-compliant for diesels and Euro 4 for petrol-engined models, compared to Euro 4 for both fuel types under the T-Charge.

As such the scheme will affect thousands more vehicles, up to 60,000 every day, compared to the estimated 6,500 a day affected by the T-Charge.

Meanwhile, some councils have started to charge owners of diesel cars more for parking permits. Islington Council in London, for example, has introduced a surcharge of £96 for anyone with a diesel car and claims it is “to protect residents from the health risks associated with diesel emissions”.

Euro 6 Diesel

But the actual position is far from clear and many argue that diesel may be receiving a worse press than it actually deserves.

For instance, the latest Euro 6-compliant diesel cars are classed as low emission for the purposes of London’s ULEZ.

This means that drivers of these vehicles will be free to enter the zone without charge – although how the planned clean air zones in other cities will be set up and charge remains to be seen.

Euro 6 standards were introduced on most new car registrations from September 2015, slashing the permitted level of NOx from 0.18g/km to just 0.08g/km.

Industry Lobbying

The UK car industry is lobbying hard for clarity which may help shore diesel sales.

The industry’s trade body, the Society of Motor Manufacturers and Traders (SMMT), claims that, by demonising diesel vehicles, the Government is removing a key tool in reducing overall pollution and is also undermining the roll-out of models with the latest low emissions.

The SMMT has stated that if new diesel registrations continue on this negative trend, the average CO2 levels from new cars across the UK could actually rise this year, the first time such an increase would have occurred since average CO2 emissions were first recorded in the year 2000.

If you would like to discuss the diesel debate and the right mix for your fleet, then please get in touch.