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German Total Cost of Ownership Study on Gasoline vs. Diesel; Estimates for the US Market
1 November 2006
by Rafael Seidl
German auto touring club ADAC (Allgemeiner Deutscher Automobil-Club e.V.) has published its annual total cost of ownership (TCO) comparison of diesel and gasoline versions of vehicles currently on the German market.
For context, here’s a translation of the boilerplate. The text obviously applies only to the situation in Germany:
In times of continuously rising fuel prices, diesel vehicles offer their owners two advantages: high fuel economy and lower prices at the pump. As the current cost comparison by ADAC shows, most diesels are cheaper to own if you drive more than 9,000 miles annually. Even below 6,000 miles per year, the diesel variant is the cheaper option overall for nearly 50% of new models on the market.
However, the comparison of 560 diesel/gasoline pairs also showed that the diesel option was not preferable in every case. In particular, this applies to models for which the diesel variant is priced much higher than the gasoline one. The higher annual license fees, higher insurance premiums and shorter service intervals can also make the cost of owning a diesel look bad.
An example calculation from the ADAC comparison chart shows that the annual savings amount to real money. At 9,000 miles annually, a BMW 320d with particulate filter costs nearly €1,600 (18%) less to operate (in each of the first four years) than the 320si does. (At 12,000 miles per year, the Jeep Commander 3.0 CRD Sport AT even delivers savings of 1,920 Euros (15%) relative to the Jeep Commander 4.7 Sport AT.)
ADAC members can access the complete table of all 560 pairings.
One reason for the improved economics of diesels is that particulate filters are standard for many models, which increases resale value. Another is that prices at the pump are significantly higher this year compared to last. This has a much greater impact on gasoline models, which consume a greater volume of fuel.
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European and Japanese carmakers have in recent months announced their intent to start selling clean diesel vehicles that comply Tier 2 Bin 5 / CA LEV 2 emissions in the US market in or after 2008. Such models are typically equipped with both particulate filters and NOx exhaust gas aftertreatment systems and may be sold in all 50 states.
This begs the question: will US consumers warm to the superior economics and lower CO2 emissions of diesels?
Given that US safety regulations, driving cycles etc. are all a little different from those in Europe, let’s pretend Germans were actually paying US prices for their fuel and see how the TCO numbers change.
Historical Energy Information Administration (EIA) data reveals that prices at the pump averaged nationally over Nov 2005 through Oct 2006 were as follows:
- reg gasoline: $2.561/gal = 0.53 Euros/liter
- prem. gasoline: $2.767/gal = 0.57 Euros/liter
- diesel: $2.693/gal = 0.56 Euros/liter
Applying the official European fuel economy data listed in the table to the two examples cited yields the following (NOTE: these are just hypothetical numerical examples, please contact your dealer regarding actual diesel model roadmaps for the US):
BMW 320 @ 15,000km (9,000 mi) annually using US fuel prices:
- diesel: 43.2 + 5.7 * (0.56 - 1.11) = 40.1 ct/km
- premium gasoline: 52.5 + 8.9 * (0.57 - 1.33) = 45.8 ct/km
- absolute savings: €855/year
- relative savings: 12.4%
Jeep Commander @ 20,000km (12,000 mi) annually using US fuel prices:
- diesel: 55.6 + 10.8 * (0.56 - 1.11) = 49.7 ct/km
- gasoline: 65.2 + 14.9 * (0.53 - 1.24) = 54.6 ct/km
- absolute savings: €980/year
- relative savings: 9.0%
This suggests US consumers can reasonably expect the upcoming clean diesel options to reduce total cost of ownership by perhaps 7-10%, relative to the gasoline alternative. This higher cost of the exhaust gas aftertreatment system is already accounted for in this educated guess. Nevertheless, this still adds up to significant absolute savings over the first four years of operation, especially for vehicle with relatively powerful engines, such as sports sedans and SUVs.
A thorough analysis will have to wait until we know exactly which diesel models will be offered in the US, their pricing, EPA fuel economy estimates, insurance rates, prices at the pump for fuel and additives etc.
Resources:
November 1, 2006 in Diesel, Fuel Efficiency | Permalink | Comments (28) | TrackBack (0)
Comments
Posted by: anon | November 01, 2006 at 03:59 AM
This seems like a short-term comparison, 4 years? Good to know that even then the diesel versions are better than the gasoline versions. But what about the fact that diesels last much longer than gasoline versions? I think two or three times longer? Is there a long-term comparison which factors in engine life expectancy and re-sale value?
I would also like to see a comparison of CO2 emissions attached to each version. A comprehensive study which takes into account the CO2 emitted to extract the oil and refine into diesel/gasoline, the CO2 emitted in the production of each version, the CO2 associated with the products necessary for regular maintenance (oil, spark plugs, etc...). Has anyone seen anything like this?
Posted by: Simpleman | November 01, 2006 at 04:16 AM
Sorry, no flaming here. I am all for diesels. They are not the ultimate solution, but they are definately a step in the right direction.
IMO, if Americans just gave modern diesels a shot, I think they'd love them. Besides having superior fuel economy, they have boatloads of torque, which is perfect for everyday driving (where you rarely crack 3K RPM)
I have myself on a wait list for a Passat 2.0 TDI and a BMW 320d. I'll decide when I get to drive them. Hopefully soon!
Posted by: John | November 01, 2006 at 04:22 AM
Anyone have a list of 2007 diesel models available in the US?
Posted by: Hydrid+E85 | November 01, 2006 at 05:48 AM
Simpleman -
Wrt CO2 emissions in use:
Burning one liter of gasoline per 100 km driven produces 2.40 kgCO2. For diesel, due to its higher C-to-H ratio, the corresponding number is 2.65 kgCO2.
BMW 320 @ 15000 km annually:
- diesel: 5.7 * 2.65 * 150 = 2266 kgCO2/year
- gasoline: 8.9 * 2.40 * 150 = 3204 kgCO2/year
- absolute CO2 reduction: 938 kgCO2/year
- diesel rel. to gasoline: -29%
Jeep Commander @ 20000 km:
- diesel: 10.8 * 2.65 * 20000/100 = 5724 kgCO2/year
- gasoline: 14.9 * 2.40 * 200 = 7152 kgCO2/year
- absolute CO2 reduction: 1428 kgCO2/year
- diesel rel. to gasoline: -20%
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Wrt production overheads:
Depending on the source of the crude, its composition incl. sulfur and salt content, how it is transported and, how modern the refinery is, only 80-90% of it end up as fuel or chemical feedstock. In the US, where the mix is skewed toward gasoline, refineries must hydrocrack not just heavy but also some middle distillates to satisfy demand. Especially in summer, caacity constraints mean some gasoline has to be imported from Europe.
US diesel contains a significant amount of a hydrocracking byproduct called light cycle oil, hence the low cetane number (ULSD does not change that). LCO is also used as heating oil, primarily on the East Coast.
In Europe, fuel demand is artificially skewed toward diesel because of differential tax rates. Refineries have to export quite a bit of gasoline and import some diesel. The diesel they produce themselves is mostly straight middle distillate.
I'm sure the refinery operators have precise data on how much energy they use to deliver finished fuels to market. This can easily be converted to CO2 emitted. However, the data is a trade secret.
You can sort of reverse-engineer an estimate by looking at wholesale prices for the various fuel grades, deducting all fuel taxes and dividing by the energy content per gallon. That gives you $/BTU or equivalent, an indication of the relative ease of production (read: energy consumed and CO2 emitted). However, margins on premium gasoline tend to be higher than on regular and diesel, so consider the results a rough indication only. I'll leave this as an exercise for the reader.
Posted by: Rafael Seidl | November 01, 2006 at 06:18 AM
Hybrid+E85 -
Afaik, the only domestically produced "light" duty diesel engine currently on the US market is the 6.6L Duramax that GM offers on some of its heavy-duty trucks. Reportedly, some 600,000 of these have been sold to date.
http://www.gm.com/automotive/gmpowertrain/engines/duramax/index.htm
The only diesel passenger car on the US market for MY 2007 is the Mercedes E320 CDi BLUETEC, which currently features an NOx store catalyst and meets Tier 2 Bin 6. That means it cannot be sold in CA, NY, MA, VT or ME. Fill up on ULSD only please!
A revised version with an SCR system, confusingly also called BLUETEC, has been pre-announced for sometime in 2008. This will meet emissions regs in all 50 states but require occasional refills of the urea-based additive at dealerships. VW, Audi and BMW have all licensed MB's SCR technology to enter/re-enter the fray with modern turbodiesel designs.
http://www.greencarcongress.com/2006/10/bmw_daimlerchry.html
Honda has also pre-announced a T2B5-compliant diesel for 2009, using a novel NOx store catalyst that produced NH3 internally.
Posted by: Rafael Seidl | November 01, 2006 at 06:37 AM
How is it that wholesale NYMEX Unleaded vs. Heating Oil(diesel) never varies much more than 20-25 cents, but retail is now more than a buck outta whack. Yeah, Yeah winter and ULSD...but that aint right.
Posted by: fred | November 01, 2006 at 07:42 AM
Kind of puzzled how numbers for US are calculated.
Taking Rafael’s data, difference in FUEL cost for yearly driving are:
Jeep: (0.57 * 14.9 – 0.56 * 10.8) *200 = 489 Euro for 20k km
BMW: (0.57 * 8.9 – 0.56 * 5.7) *150 = 282 Euro for 15k km.
How the heck you get your numbers for more expensive to purchase, insure, and maintain diesel vehicles?
Posted by: Andrey | November 01, 2006 at 07:54 AM
But what about the fact that diesels last much longer than gasoline versions?
That's a fact? Where is this "fact" proven?
Posted by: brt | November 01, 2006 at 08:29 AM
Don't you have to include the soot factor in regards to diesel's effect on global warming? I have read it could be up to as much as if the diesel fuel generated 30% more CO2. Also diesel is responsible for a lot of the higher rates of asthma in urban areas. If this is true than I would not like to see an increase in diesel use in cars.
Posted by: DJS | November 01, 2006 at 08:57 AM
DJS - not an issue if you assume diesels are equipped with particulate filters (DPFs), which Raphael seems to suggest is the case in this article. As a matter of fact, diesels with DPFs usually have lower emissions of PM (in terms of both number and mass) than even gasoline vehicles.
Posted by: Carl | November 01, 2006 at 09:40 AM
I own a diesel Corolla (1.4D4D) with good engine (aluminium, 1600bar). Many new TDI or CDI diesels you praised here suffer from black smoke, which I didn't find on mine car or other Toyota or Honda or even Renault cars.
However, I think gasoline hybrid is a much better solution, especially for urban traffic. Zero polution, much better mpg...
For highway hibrid also prooves very good; a test at km77 of the GS450h reveals a 10litres/100km al 200km/h average speed on track; no other car, diesel or gasoline, can't match this performance.
Posted by: mircea | November 01, 2006 at 09:43 AM
One can get a good sense of the economics in the US by simply comparing the TCO of different configs of the '06 Golf over at Edmunds.com.
For the manual, gas is 47 cents per mile compared to 49 cents per mile for the diesel over a 5 year period. For the automatic, gas is 48 cents and diesel is 51 cents.
The TMV premium of diesel is about $1,600 for the manual and about $1,800 for the automatic.
The new ULSD fuel will up the relative fuel costs compared to the old diesel fuel, and the new emissions tech is going to up the cost of the vehicle itself relative to the older technology. So, one could anticipate the TCO differential would increase relative to the '06 baseline.
Posted by: pizmo | November 01, 2006 at 09:53 AM
I'm looking forward to purchasing a micro-hybrid 2010 Saturn Astra, Ford Focus replacement, or Dodge Caliber with the Tier 2 Bin 5, sub 2L turbo-diesel. It won't cost too much to buy or maintain. It will have good resale value. Our domestic auto industry can sell them to earn a reasonable profit. I don't believe that the Prius or Civic hybrids are being sold at a profit, especially considering the tax credits.
Posted by: JC | November 01, 2006 at 10:17 AM
Our domestic auto industry can sell them to earn a reasonable profit.
How exactly is a Dodge a "domestic" auto and a Civic isn't? Both are manufactured in the US and both are foreign-owned companies.
Posted by: pizmo | November 01, 2006 at 10:38 AM
Thanks, Rafael for an excellent and much-needed article. Indeed, we shall see more diesel car model offerings in the US. The near-term development in automotive technologies is exciting to watch.
Posted by: Roger Pham | November 01, 2006 at 12:12 PM
For pizmo:
Yes, the Civic is domestic; but Honda is presently producing relatively few diesels. I would be surprised if Honda would agree to buy diesels from Isuzu (or better - buy Isuzu outright). Toyota has recently announced that it will not produce hybrid diesels. I hope that they change their vision for the near-term future. Our "bigger 3" produce large numbers of diesels in Europe. They have the ability to build large numbers of small diesel engines in North America. I hope that they get the courage to do the right thing. I'm hoping to soon see AFFORDABLE, clean, micro-hybrid, turbo-diesel powered cars produced in large numbers for us to enjoy.
Posted by: JC | November 01, 2006 at 12:23 PM
Simpleman,
4 years, or 48 months, tends to be when many car owners start to trade their vehicles in for a newer model.
_
DJS,
Diesels are also ~30% more efficient vs Otto (sometimes more).
_Tier2Bin5 and Euro5 engines will solve much of the PM and NOX problem with diesels. They are a few years off, but DaimlerChrysler got their BlueTec system that is in production, and is pretty clean, even w/out AdBlue. The baseline DeNOx equipment makes it 45 state compliant, with the addition of the AdBlue subsystem making it up to snuff in states following CARB standards. There is another system, HyDrives' H2 (and O2) generating system that improves fuel efficiency ~25%, while knocking down pollutants to Euro5, if not Tier2Bin5 levels in diesels.
BlueTec, DeNOx, and AdBlue:
http://en.wikipedia.org/wiki/BlueTec
Posted by: allen_Z | November 01, 2006 at 12:28 PM
Odd choice in vehicles for the the study, and
Most of these vehicles are SUV/entry-luxury/luxury (Phaetons, Jeep, Audi, BMW, Mercedes-Benz) vehicles with higher prices that absorb most of the initial cost of the vehicles and are generally larger.
Glaring absent from the study is this comparison are high-volume economy cars like VW Golfs, Honda Civic, Peugeot 207, Micras, Meganes, etc.
While I don't disagree with the general assertion, the study seems severely padded in one direction, and conflicting data could have been purposefully been withheld.
Posted by: Dr. Henry Noh | November 01, 2006 at 12:50 PM
Dr. Henry Noh
The savings would be similar - but few people drive such cars in the US, mainly in Europe and japan.
Posted by: mahonj | November 01, 2006 at 02:20 PM
The smaller cars have already been done. The savings were higher.
Our 2005 TDI, 31,000 miles
Oil changes at dealer $65 every 10,000 miles
Fuel filter, Air filter, cabin filter at 30K $70
last tank of fuel 48.3 miles per gallon
And it's not hard to see why.
Posted by: Joseph | November 01, 2006 at 02:40 PM
Andrey -
as I pointed out, there simply are no numbers regarding the price of diesel cars, their fuel economy, maintenance overheads etc. for the US market. The object of the exercise was to guesstimate how the upcoming re-entry of diesels into the US market might be received by US consumers, purely in dollars and cents terms.
That is why I reversed the direction and calculated how purchasing decisions by German consumers would be affected if they were paying US fuel prices. Apparently, this cuts the advantage of diesels over gasoline cars in half, but it remains substantial. Since I only changed the assumptions about fuel prices, all of the other factors that go into a TCO calculation remained unchanged.
In a second leap of faith, I implicitly assumed that factors other than fuel cost were roughly comparable for Germany and the US, e.g. license fees and insurance rates. This is almost certainly not true, which is why I cautioned that a thorough analysis is not possible at the present time.
Is this hypothetical sleight of hand a valid methodology? Surely, if fuel prices changed this radically, at the very least vehicle pricing would change as well. Fair enough, but predications are always wrong, especially the ones about the future.
I mainly wanted to refute the sometimes-heard argument that diesels will never take off in the US because a gallon if diesel is more expensive there than a gallon of gasoline.
Dr. Henry Noh -
the complete ADAC survey actually covers 560 vehicle models that are available with both diesel and gasoline options in Germany. This includes the models you mention. However, the full report is only available to paid-up members of ADAC. Moreover, the table of the top 10 - which is freely accessible - happens to include the types of passenger cars most likely to be offered with a diesel option in the US in the next few years.
Posted by: Rafael Seidl | November 01, 2006 at 02:47 PM
The smaller cars have already been done. The savings were higher.
Strange, since that's the exact opposite of the numbers I saw at Edmunds.
Our 2005 TDI, 31,000 miles
Oil changes at dealer $65 every 10,000 miles
Fuel filter, Air filter, cabin filter at 30K $70
last tank of fuel 48.3 miles per gallon
Anecdotes are not generalities.
Posted by: pizmo | November 01, 2006 at 02:48 PM
Saab 93 turbodiesel at 70K. 6pack of Mobil 1 and filter every 5K...about $40. Same air filter as gas motor...$16. B11/ULSD $2.62/gal. 34-46mpg. No ignition system...priceless.
Posted by: fred | November 03, 2006 at 09:28 PM
priceless
If they're so "priceless", how come they don't sell well?
Posted by: pizmo | November 06, 2006 at 10:11 AM
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