General Motors Bullish on Diesel Despite Global Crackdown

August 31, 2017 by Ryan ZumMallen, @Zoomy575M

U.S. auto buyers generally shun diesel-powered vehicles despite their popularity in Europe and elsewhere, a wariness that has only increased as a series of emission scandals have plagued the car industry.

But General Motors Co. remains undeterred, believing that the American public can still be won over by diesel technology that is both fuel-efficient and provides satisfying driving dynamics.

The Detroit automaker is readying the introduction of its 2018 Chevrolet Equinox, which offers a 1.6-liter diesel engine option. That will expand diesel engine options to 10 vehicles for the 2018 model year, said Dan Nicholson, vice president of global propulsion systems at General Motors.

GM sold 147,000 vehicles equipped with diesel engines in 2016, accounting for just 4.8 percent of its total U.S. sales of more than 3 million.

The company thinks the new 1.6-liter diesel engine’s strong performance and reduced noise and vibration will attract U.S. buyers, Nicholson said.

But the automaker looks to be doubling down on diesel technology at a time when both consumer and regulatory sentiment have turned against the fuel.

Ecotec 1.6 Turbo Diesel illustration for Cruze and Equinox

Ecotec 1.6 Turbo Diesel illustration for Cruze and Equinox. (Photo: General Motors)

The case for diesel hasn’t been helped by a series of emission scandals, including the 2015 revelation that Volkswagen installed software in diesel vehicles sold in the U.S. that cheated nitrogen oxide, or NOx, emission tests. The discovery forced the company to offer to buy back more than 550,000 vehicles in the U.S. alone and has cost the German automaker at least $21 billion in the U.S. in fines, settlements and restitution.

In the wake of the Volkswagen scandal, other automakers are being questioned about their diesel claims. Fiat Chrysler Automobiles and Mercedes-Benz have faced accusations as well.

Compared to gasoline-powered engines, diesels have greater fuel efficiency and produce less of the harmful carbon dioxide – or CO2 – emissions that have been associated with climate change. More than half of all new cars purchased in Western Europe are diesels, according to the European Automobile Manufacturers Association.

However, they produce greater NOx particulate emissions, said Paul Lewis, a policy analyst at the non-partisan Eno Center for Transportation.

“Diesels are very fuel-efficient,” Lewis said. “But they produce localized particulate emissions that are bad for air quality. The smog that falls over Berlin or Paris or London is in large part due to those particulate emissions.”

In 2016, mayors in Paris, Madrid, Athens and Mexico City issued bans on diesel engines by 2025. Berlin has already prohibited certain older diesel engines, and Munich is working on regulations for 2018. Oslo will nearly double the toll-road fee for diesel-powered vehicles during rush hour.

A report released by the Center for Automotive Research in June painted a bleak picture for the future of diesel.

“Diesel will face increasingly significant headwinds in many key markets as governments increasingly tighten NOx and particulate emissions regulation and focus on more rigorous testing,” the report reads.

“In recent years, diesel technology has lost share in Europe and faces challenges from urban local emissions regulations in several regions.”

The U.S. is not likely to consider similar bans any time soon, Lewis said.

“This particular administration is not overly concerned with environmental regulations,” he said. “My perception is that the standards we have in place for clean air will remain.”

But that doesn’t mean that Americans will warm to the idea of diesel.

Nearly 100,000 diesel-powered new passenger vehicles were registered in the U.S. in 2014, approximately 1.1 percent of all vehicles sold, according to industry research firm IHS Markit.

That number shrunk to just 7,349 in 2016, or 0.1 percent of the market. IHS Markit estimates that diesel sales will hit 43,000 in 2019 but shrink to about 12,000 by 2025.

diesel graph


“There’s a big drop in the number of diesel vehicles that are out there right now,” said Eric Lyman, vice president of industry insights for auto price forecasting firm ALG.

“Diesel has taken a hit not just in the U.S. but worldwide,” Lyman said. “There is this understanding now that they’re not as clean as we were led to believe.”

Yet GM insists that diesel adoption is still in its infancy.

“Diesels are and will continue to play an important part of our fuel-economy goals,” Nicholson said.

The company cited an internal study that found 16 percent of U.S. buyers would consider choosing a diesel option, and offering the new 1.6-liter engine as consumer preferences shift from cars to crossovers could prove fruitful.

GM expects the compact SUV market to reach 3 million in sales by 2020, equaling a potential customer base of 460,000 buyers.

The 2018 Equinox diesel received an Environmental Protection Agency rating of 28 mpg in city driving, 39 mpg on the highway and 32 mpg in combined driving. The figures mirror its GMC Terrain sibling with the same engine.

Those numbers place the Equinox and the Terrain at the top of their respective classes. The Equinox beats out other compact crossovers like the Nissan Rogue Hybrid and Toyota RAV4 Hybrid. The Terrain bests luxury competitors such as the Lexus NX Hybrid and Jaguar F-Pace 20d.

Still, putting diesel engines in vehicles other than trucks has not proved to be a successful sales strategy for GM.

Michael Siegrist General Motors

Michael Siegrist, powertrain engineer on the Equinox. (Photo: Ryan ZumMallen/

Just 232 units of the Chevrolet Cruze Diesel compact sedan, which uses the same engine as the Equinox, were registered in 2016, a mere 0.17 percent of the 132,000 Cruzes sold last year, according to IHS Markit.

GM also faces allegations that its diesels don’t meet emissions standards. A May class-action lawsuit filed in the U.S. District Court for the Eastern District of Michigan alleges the automaker used so-called “defeat device” software in 2011 to 2016 Chevrolet Silverado and GMC Sierra pickups to trick regulators into believing the engines meet emission standards.

Evidence presented in the GM lawsuit “does suggest there’s an improper calibration” in the diesel engine evaluated, said John German, an instrumental researcher in the VW investigation and senior fellow at the International Council on Clean Transportation.

The scandals have damaged diesel’s reputation among buyers of passenger vehicles, Lewis said.

“Consumers don’t want to be caught with a car that may need to be recalled,” he said. “It’s going to take some time to repair the skepticism from that.”

A 2015 study by the University of Michigan Transportation Research Institute, conducted months before the VW scandal broke, found that U.S. buyers were already wary of diesel.

Researchers asked 674 drivers over the age of 18 whether they would consider certain technologies if gas were priced at $2.50 per gallon, and then at $5 per gallon.

“At both prices, gasoline-hybrid vehicles were the most preferred vehicle type, while diesel internal- combustion engines were rated as the least preferred,” the report reads.

The study also found that diesel-powered vehicles on average cost $4,870 more than their gasoline-powered versions, and that the fuel savings will take 16.6 years to pay back the difference.

Some buyers who previously owned the recalled Volkswagen models and like what they drove may be willing to explore new diesel vehicles, Lyman said.

“Is this a way they can potentially pick off people that may have never considered Chevrolet?” he said.

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