Death Of Diesel: 2020 Could Be The Beginning Of The End

Death Of Diesel: 2020 Could Be The Beginning Of The End

Next year could be ‘make or break’ for diesel due to confused government policy. In five years time just one in ten new car sales could run on the fuel…

The Death Of Diesel?

A leading academic has claimed that just one in ten new car sales could be diesel in fives years time. As it stands, four out of ten use the fuel; already a steep decline from just a few years ago, when it shared an equal place alongside petrol. It’s also on the wane in the company car market, where it was favoured for CO2 performance and fuel economy. David Bailey, Professor of Business Economics at the Birmingham Business School, isn’t optimistic about the future. He said, “there seems to be no end to the decline in diesels”.

Over the last year, diesel sales have fallen by a fifth; from 650,000 last year to 515,000 this year. That’s according to the Society of Motor Manufacturers and Traders (SMMT). According to some forecasters, the decline of new car sales could lead to a state of under-supply of used vehicles in 2020/21. This would help maintain residual values. That said, it’s still unclear whether the decline of the fuel will be felt in the used car market. Thus far, sales grew by 1.4% in the third quarter of the year, reaching 858,442 transactions. Bailey explained, “a big shift away from diesel is still taking place. In late 2015, diesel accounted for more than 50% of the market, by March last year it was down to 32% and it has fallen further since then”.

Not Just The UK

It’s not just the UK that’s turning its back on the once favoured fuel. Sales are actually declining all across Europe. Even in the key market of Germany, it’s fallen below a 30% market share. It once made up half of it. A similar scenario is unfolding in France, where three-quarters of new car sales used to consist of diesels. Bailey said, “we are seeing this continuing decline and, while I originally thought the market share for diesel by 2025 would be down to 15%, I now think that’s quite optimistic – it may be as low as 10%”. However, the fuel has never really succeeded in penetrating non-European markets. It’s negligible in the United States, being used primarily by long-distance truckers and haulers. The vast Chinese market is similar.

Bailey attributes the rise of diesel to generous tax breaks, born of the view that it was better for the environment. However, in the aftermath of Dieselgate and the latest emissions-related research, it’s decisively fallen out favour amongst legislators and environmentalists. He thinks, ultimately, that people are overreacting to these developments and that a confused government policy is making the situation worse. He said, “people are completely freaked out over diesels. They are concerned about falling resale values, they are worried about tighter regulations in cities, higher taxes and its impact on the environment”. He’s described tax rates and emission standards as a “complete shambles”.

With tougher emissions standards, demonsiation (deserved or otherwise) and initiatives like Bristol’s diesel ban, it’s unlikely the fuel will ever recover its former popularity. Whether it will remain relevant at all, however, has also become a much more open question…

The Rise And Fall Of Diesel –

Diesel Continues To Decline Despite Cleaner Technologies –

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