Diesel could decline to just 30% market share in Europe by 2030
By 2030, the share of diesels on the European new-vehicle market could decline to just 30%, a new report by Standard & Poor's predicts.
The report, quoted by Autovista Group, suggests that negative press attention towards diesel is a major factor for manufacturers in phasing out diesel technology.
Dieselgate scandal
Diesel stood at its peak in 2011, when it commanded 56.1% of the European new-vehicle market. Its slow decline was accelerated by the Dieselgate scandal, which broke in September 2015.
As a result, diesel represented only 48.3% of new-vehicle sales in Europe in 2016 – the first time diesel dropped below 50% since 2006. The decline has continued, S&P points out: in August 2017, the share of diesel in the European automotive market stood at 42.7%.
Consumer confidence
And worse is to come for diesel, the report predicts – especially in Spain and Germany. “The market share of diesel will gradually decline, being replaced by petrol and EVs”, while “bad publicity (towards diesel) continues to undermine consumer confidence”.
The rapidly shrinking reserves of public goodwill towards diesel are putting vehicle manufacturers in a tight spot. They are – or were – reliant on diesel to in order to meet strict European emissions regulations on CO2, which diesels emit less of than petrol-engined cars.
CO2 output
As petrol cars are picking up most of the slack left by the decline of diesel, manufacturers risk not reducing their overall CO2 output by enough to conform to EU standards, which could lead to massive fines by 2021, the end date of the current target period.
This is why a number of manufacturers are racing forward with their electric plans, hoping that EV uptake will lessen their overall CO2 output. The question is whether the electrification process, which is slow, will provide enough emissions benefits before the aforementioned date.
EV models
Volkswagen, which precipitated the recent sharp decline in diesel popularity by its Dieselgate scandal, says it wants to have 80 EV models on the road – a total that will be reached only by 2025. Daimler, parent company of Mercedes-Benz, has stated that it will start turning out EV models by 2018 – and has been vocally defending diesel's continued relevance on the automotive market.
But it's not just the public mood that's turned against diesel. Governments as well are taking steps. In fact, both France and the UK have said they will ban the sale of not just diesel cars, but also petrol cars by 2040 – and Norway will even attempt to do this by 2025. The measures are meant to speed up the transition to a post-fossil mobility future.
Residual value
As the demand for diesel drops, one of the main risks listed in the S&P report is the loss of residual value of diesel vehicles, for example of the large volumes of diesels that are remarketed annually from the rental and leasing industries.
What's more, according to S&P, the transfer from diesel to electric mobility “will lead to the reduction of the leasing and renting operations of large companies, particularly in the premium segment where the proportion of diesel is higher”.
