Diesel sales plummet as electric cars shine


Diesel is set to “almost disappear” from the international car market over the course of the next decade as it faces a “perfect storm” from the competition posed by more affordable electric cars and tougher legislation imposed by regulators, a UBS report has predicted.

The once competitive price advantage diesel enjoyed by diesel vehicles for so long will become a thing of the past, as the cost of hybrid and electric vehicles plummets. Tighter legislation following the emissions scandal will see diesel’s share of global car sales drop from 13.5% to just 4% by 2025, the bank predicts.

In Europe, where diesel has always fared strongest, sales are forecast to fall from 50% to just 10%.

This represents an increase in what was already a declining market, triggered by the fallout from the VW emissions scandal.

The decline is far harsher than many industry experts had forecast, and comes as the largest car makers mull over whether the fuel is a viable option for the future. The majority are all pursuing some form of electrification in order to comply with CO2 targets.

Diesel emits a fifth less CO2 than the petrol equivalents, but it is no longer the easy alternative it once was, due to tightening legislation regarding Nitrogen Oxide emissions – a harmful byproduct of diesel engines.

To combat this, most manufacturers will be launching fully electric cars within the next five years.

It’s likely that diesel cars will be replaced by 48V mild-hybrid technology, which mates a small petrol engine with a large battery and similar fuel economy and performance to diesel, whilst eliminating any output of NOx, the summary forecasts.

UBS predicts sales of 48V cars to surpass diesel throughout the globe by 2021, and will equate for 25% of all cars sold by 2025.

In Europe, diesel sales reached a peak in 2012. The fuel is taxed around €0.15 less than petrol, which accounts for the fuel’s popularity.

France and Belgium have made pledges to close this gap, and certain cities including London, Madrid, Paris and Athens intend to ban the vehicles from their central areas.

“In the aftermath of the Volkswagen diesel issue, politicians and regulators have become highly sensitive and increasingly populist about diesel emissions,” said the report.

“Even if some plans appear overly ambitious, the direction of travel is obvious and likely irreversible.”

Diesel is still likely to remain prevalent in trucks and large SUVs.

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