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A new level of scrutiny will change things. It may turn out that other manufacturers are using similar software to cheat on either NOx or carbon-dioxide tests. The NOx emissions from new diesel cars in Europe are on average five times higher on the road than in tests; some cars run at ten times the limit, according to T&E. But even if they are not, a wider understanding of the bogus way in which the system runs seems sure to provoke action, and weaken the power of the industry to keep the system lax. Carmakers have been lobbying against the EU’s plans to introduce more realistic cycles into their tests by 2017, saying it can’t be done until 2020. Their pleading is unlikely now to help; the changes may not just arrive in 2017 but also be more exacting than previously planned.
This all takes place against a background of increasingly strict controls on carbon emissions. Europe’s carbon-dioxide goal of an average of 95g/km across all a carmaker’s models by 2021 is already demanding. It will be even harder to achieve if it has to be reached honestly. The same goes for more stringent fuel-economy standards that are coming soon in other markets such as China, America and Japan.
The industry had built a continuing shift to diesel into its assumptions about how it would meet these requirements. But if diesels cannot deliver low NOx emissions while maintaining high fuel efficiency and staying affordable, that assumption will have to be jettisoned—quite possibly taking with it the whole idea of diesel engines for mass-market cars. They are difficult and expensive to develop, and there is already a backlash against them in Europe, where they are blamed for high particulates as well as NOx; both Paris and London have talked of banning them.
If diesels cannot deliver then carmakers will need to turn heavily towards hybrids and very efficient small petrol engines. All this at a time when, according to Mary Barra, boss of GM, carmaking already faces more change in five to ten years than in the previous half-century. On top of meeting environmental targets and pioneering new hybrid and all-electric drivetrains carmakers need to spend a lot on using the internet to make their machines smarter and preparing them for the advent of autonomous driving. The investment required will be monumental, and some will surely be unable to bear it.
Meanwhile cut-throat competitiveness is only going to get more intense as non-carmakers with deep pockets, such as Google and Apple (see article), eye up the industry. One answer is consolidation to tackle overcapacity. Big mergers have generally proved disastrous in the industry—but then so have attempts to become number one by other means. It was a devotion to size above all things that led to Toyota’s devastating outbreak of quality defects in the late 2000s, and the same ambition has played its role in the downfall of VW. If the gathering emissions scandal has any virtue it may lie in forcing a reshaping that the industry badly needs.
From the print edition: Briefing
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