Monday, August 14, 2017

Diesel Scandal Takes Down Motor Fuel Category

The diesel emissions scandal has had a bigger impact on transportation policy than I would have guessed. As industry analysts had told us early on, it was more than just Volkswagen cheating emissions tests. In the time since the scandal broke, the global warming problem has become more dire. 

It now looks like the phase-out of diesel will take all liquid motor fuels with it. Norway is moving quickly and has set 2025 for its transition to electric cars. The United Kingdom and France have made plans to phase out fuel-burning light road vehicles after 2040. Volvo said that by 2019 — two years from now — a fuel-burning car will be a luxury item. Volvo will be selling hybrid and electric models side by side starting in 2019, but will no longer make fuel-only drives. Today the government in Germany conceded that a phase-out of fuel-burning cars is inevitable and will probably happen sooner than 2040 in practice.

In the meantime in the United States, Tesla started shipping its mass-market electric car, for which it has taken more than half a million advance orders. For everyone who has ordered a Tesla, there are 200 drivers who, like me, are looking on with a degree of envy. Tomorrow I will put another another $33 in my car’s fuel tank. A few lucky drivers won’t be doing that. I might be too cautious to buy an electric car at this point, but I have trouble imagining the logic of buying a new fuel-burning car at this point. Most of us will become electric-car drivers as part of the vehicle replacement cycle, but the transition will certainly come sooner than the 20-year life span of a current new car. In practical terms, the whole auto industry could stop making new fuel-only cars at the end of the 2018 model year and the existing stock of vehicles would serve.

Norway with its 2025 target and California with an ambitious clean-air plan might be ahead of the curve, but the United Kingdom, France, and Germany are only following the trends with their 2040 cut-over. We tolerate fuel-burning cars now out of a sense of practicality. The battery of an electric car costs more than the engine of a fuel-burning car. When this comparison approaches parity, fuel-burning cars could fall out of favor in a period of less than a model year. Automakers and dealers need to plan for this decline so that when it hits, they aren’t stuck with an overhang of obsolete inventory.

It’s easy to see the transition to electric for the smallest vehicles, harder for the largest ones. Cargo transportation and air travel make more efficient use of motor fuel. Ships have longer useful lives, are harder to overhaul, and have nowhere to plug in on most days. Upgrading all our cars is perhaps a large enough challenge to take on right now. With what we learn from the transition in cars, we will surely be able to make a better plan for buses and trucks, and then we can go on from there.