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UMTRI study finds US diesel vehicles generally have lower total cost of ownership than gasoline vehicles

28 June 2013

TCO for selected gas and diesel vehicles over a 3 year timeframe. Source: UMTRI. Click to enlarge.

Diesel vehicles generally saved owners between $2,000 to $6,000 in total ownership costs during a three to five year period when compared to similar gasoline vehicles, according to data compiled by the University of Michigan Transportation Research Institute (UMTRI). The studyTotal Cost of Ownership: A Gas Versus Diesel Comparison—was conducted for Robert Bosch LLC; the results were released at the 2013 Alternative Clean Transportation Expo in Washington DC.

The report reviewed the role diesel vehicles play in the current vehicle fleet by analyzing the Total Cost of Ownership (TCO) for clean diesel vehicles and comparing their TCO to their gas vehicle counterparts. The UMTRI researchers—Bruce M. Belzowski and Paul Green—built the TCO model by developing three and five year cost estimates of depreciation by modeling used vehicle auction data and fuel costs by modeling government data.

They combined these estimates with three and five year estimates for repairs, fees and taxes, insurance, and maintenance from an outside data source. The results showed that advanced diesel vehicles generally provide a return on investment in both the three and five year timeframes, although there are differences in the amounts of return among mass-market vehicles, medium-duty trucks, and luxury vehicles.

Overall, the results of our analyses show that diesel vehicles provide owners with a TCO that is less than that of the gas versions of the same vehicles. The estimates of savings for three and five years of ownership vary from a low of $67 in three years to a high of $15,619 in five years, but most of the savings are in the $2,000 to $6,000 range, which also include the extra cost that is usually added to the diesel version of a vehicle. Though there are some exceptions to these positive results for some of the diesel versions of vehicles from a TCO perspective, the overall direction of the results support the idea that diesel vehicles compete well within the US market. In particular, the idea that one can get a return on one’s initial higher investment in a diesel vehicle within three years is a very positive sign, considering that new vehicle buyers tend to keep their new vehicles for an average of three to five years.

Some continuing challenges for diesels in the US include the potential increase in the cost of diesel fuel compared to gasoline, and the resulting need for diesels to proportionally improve their fuel economy to maintain a TCO advantage. This is particularly important because both gasoline and diesel powered vehicles must improve their fuel economy as required by Corporate Average Fuel Economy (CAFE) regulations for 2016 and 2025.

As the market for diesels increases as more diesel powered vehicles are introduced into the market (diesel variants of the Chevrolet Cruze, Jeep Grand Cherokee, Ram 1500, and Ram ProMaster have recently been announced and will be the first American-branded, light duty diesel vehicles) the premium that diesels carry in the marketplace today may decrease through the sheer number of competing models. But the increased number of diesel models in the fleet may also bring down the price of diesel powered vehicles, providing consumers with both price and fuel savings. Diesel powered vehicles are providing significant value to their owners through their TCO advantage over their gas powered counterparts, and they will play an increasingly important role for manufacturers and consumers as fuel economy regulations becoming increasingly strict.

—“Total Cost of Ownership”

Highlights from the diesel-gasoline comparisons include:

  • Total Cost of Ownership. In the three-year timeframe comparison, diesel vehicles in the mass market passenger car segment are estimated to save owners significant money, with the VW Jetta owner saving $3,128, the VW Jetta Sportwagen owner saving $3,389, and the VW Golf owner saving an estimated $5,013.

    In the luxury segment, all the diesel versions of the Mercedes-Benz E Class ($4,175), Mercedes-Benz GL Class ($13,514), Mercedes-Benz M Class ($3,063), Mercedes-Benz R Class ($5,951) and VW Touareg ($7,819) save owners money in the three-year timeframe.

  • Fuel Efficiency. All of the diesel vehicles had better miles per gallon than the gasoline versions with the diesels having between 8 to 44 percent higher miles per gallon.

  • Fuel Costs. All of the diesel vehicles had lower fuel costs than all the gas versions of comparable vehicles, with 11 of the 12 vehicles showing double digit reductions in fuel costs, ranging from 10 to 29%. Similar to the three-year comparisons, five-year estimated fuel costs for diesel vehicles are less than those of comparable gas versions. The percentage difference in terms of the reduction from gas to diesel costs decreased for some diesel-gas comparisons as diesel prices began to increase around the 2005 timeframe.

  • Depreciation. 11 of the 12 diesel vehicles held their value better than comparable gas vehicles over the three year timeframe with eight vehicles showing double digit percentage savings ranging from 17% up to 46%. 9 of the 10 diesel vehicles hold their value better than comparable gas vehicles over the five-year timeframe, with five vehicles showing double digit percentage savings ranging from 10% up to 39%.

June 28, 2013 in Diesel, Market Background | Permalink | Comments (11) | TrackBack (0)


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Kit P's position to the contrary, my 2004 decision to go with a diesel car is vindicated (I held it for 8 years and 150,000+ miles).

We'll see what happens with the latest vehicle, but since the last fillup the car reports I have covered 106+ miles on 0.08 gallons of liquid fuel.  Lifetime average fuel economy is over 105 MPG.

The most interesting thing to me is that this is with very early batteries and other systems; it is only going to get better from here on out.

Europe hasn't gone 50-70% diesel for the shear fun of it.
With fuel at 7-9$/ US Gallon (petrol and diesel) for the last 8 years or so, we have had a powerful incentive to buy diesel for larger vehicles.

Almost nothing over 1.6 is petrol, even when people don;t do high mileages.

It is also very hard to sell a 2L+ petrol car used.

To be honest, it is beyond logic for low mileage people, but the used values forces people to buy diesel - there is a strong push from the used values.

I am surprised to see that 11 of the 12 diesel vehicles held their value better than comparable gas vehicles. This is normal in Europe where the market for diesel cars is developed but I had not expected that for the USA, not yet, in any case. In Sweden, the market penetration of diesel cars was very low until late 1990´s and used diesel cars were cheaper that gasoline cars. About 1997/1998, used diesel cars became more expensive than corresponding gasoline models, indicating that at least 10 % market penetration would be necessary for this to happen (today, it is ~65% in Sweden). Apparently, this is not the case in the USA.

Due to low performance of current generation EV batteries, PHEVs are the most fuel efficient 'all around' family vehicles.

With higher performance batteries (2X to 4X) by 2018/2020 or so, extended range BEVs make move in and take the favored spot away from PHEVs. Of course, those higher performance batteries will also help PHEVs to reach higher fuel economy. The battle may last 10++ years.

PHEVs may remain the winner for heavy vehicles travelling long distances.

Notice that the majority of the TCO differential between diesel and gasoline is due to lower depreciation of diesel vehicle. The saving in fuel cost is not so much, probably due to the higher cost of diesel fuel. This brings up more food for thought: Why diesel vehicles retain higher value than gasoline vehicle? Probably due to the higher durability of the diesel engine.

Bring this same logic to the TCO's of PHEV's vs. conventional ICEV's, and what will we find? PHEV's with dual power plants ought to be far more reliable and durable than a comparable ICEV...eventually, PHEV's will have much lower depreciation cost than ICEV's. Adding this advantage to the much higher fuel cost savings of PHEV's and much higher maintenance cost savings of PHEV's...and we will see even higher TCO differential between a PHEV and a conventional ICEV!

RP may be right and even more so for small recent diesel PHEVs.

An ideal mix of battery pack type/size and higher efficiency small light weight diesel generator could produce super PHEVs.

I'm doubtful that diesel PHEV is going to be a winner.  Here's my quick rundown of the reasons:

  1. The difference in thermal efficiency between GDI and diesel is small.
  2. The cost of ULSD is substantially higher than gasoline, except where taxes discriminate against the latter.
  3. As the ICE is used less and less, the owner derives less benefit from the investment in the diesel engine.

I'm waiting for some automaker to go to a 1-liter turbo-Atkinson engine.  And before you nay-sayers start up about the Atkinson cycle not having enough exhaust to drive a turbocharger, I'll remind you that

  • Variable-geometry turbos can generate back pressure by closing the exhaust nozzle vanes.
  • Tricks such as retarded ignition timing can add heat (and thus energy) to the exhaust to spool up the turbo.
  • The HSD transmission scheme (used by Toyota and Ford) allows the engine speed to go up to increase the exhaust flow for the turbo.

PHEVs might also cause double the trouble. This is usually what happens with increased system complexity. Why should it be different this time? I do not think the PHEV ICEs are designed for the same life as a conventional ICE. In addition, this ICE would have to operate at higher BMEP than a conventional ICE. This usually increases wear in gasoline engines (though not to the same extent in diesel engines but we could anticipate the use of gasoline engines in this case). The number of cold starts – notable for increasing engine wear – would not decrease considerably and starts in general would increase significantly. A typical test cycle to increase wear in endurance testing is to cycle between low load and full load. In this case, it would be cycling between no load and full load, which is hardly favourable from a wear point of view, perhaps even worse than the former. One particular component that does not like this load cycle is the turbocharger (if fitted). Finally, electrical systems are notorious for causing trouble in conventional vehicles. Why should more of the same be beneficial from a reliability point of view? Reliability problems often cause other problems that also could limit the life of the rest of the drive system.

Good points, E-P.

Less frequent use of the ICE means that the ICE should be optimized for low cost and low weight, not for maximum efficiency. Yet, a significantly downsized ICE in a PHEV will operate with even higher efficiency at high load than a much larger ICE in a conventional ICEV, without major expenses of valve modulation and other tweaks to make a larger ICE operate efficiently at low part load.

I'm waiting for Ford to chop the 144-hp, 2-liter Atkinson-cycle engine in the C-max Energi to half, to a 1-liter-2-cylinder engine having 72 hp, without needing turbocharging. The combined hp of the ICE and the 2 motor/generators should be more than adequate for spirited driving.
The increase room in the engine compartment and the lack of a lead-acid battery can be used to store 1/2 of the battery volume, yielding more trunk space in the rear. The fuel tank size can be reduced to 1/2, thereby yielding even more trunk space.
The weight saved from the engine downsizing will lead to further saving in weight from the suspension, drive train motor generator, battery capacity, wheels, tires, body, etc...if re-designed as a "clean-sheet" approach to an optimized PHEV!

It is possible to design a PHEV to have competitive trunk space and curb weight to a conventional ICEV. Initial purchasing cost will be reduced when the ICE is reduced in size and in cylinder count, with accompanying downsizing of other drive train and structural components.
Acceleration will be better due to the higher torque of the motors, and maneuvering will be better due to the lower Center of Gravity position made possible by putting the battery in lowest position.

A next-gen PHEV will really shine if given a serious, clean-sheet approach to its design and optimization for the PHEV role. This is a main reason why clean-sheet HEV-optimized designs like the Prius and C-max hybrid are so successful as HEV's in comparison to other after-thought HEV's such Honda Civic/Accord hybrid, or Camry hybrid, or Lexus hybrid, or Fusion hybrid, etc... that must share the same platform as ICEV's.
The C-Max Energi and Prius Plug-in, however, are not optimized PHEV's, so are not performing close to their potentials.

FYI, the Fusion Energi does have a lead-acid battery.  It's relatively small, and sits in a compartment on the left side of the trunk.

The convention appears to be to use a lead-acid battery to provide power for the electronics and accessories, and charge it from the traction system using a DC-DC converter.  If the accessory battery goes dead, the car won't go (can't power up the electronics to activate the main power) and needs a jump start.

One flaw that I see right off is that they're comparing premium gasoline cars versus diesel. The fuel cost differential to diesel is much smaller and easily skews results.
They should also include the chevy cruze eco vs cruze diesel.
In addition, the average buyer of a diesel will drive more miles per year than the average gas buyer. Therefore the resale of the gas version will have lower miles than the same year diesel in all likelyhood. The annual fuel cost would be higher for the diesel due to more miles but you could equalize it by calculating the cost per mile over the 3 or 5 year time span and compare that.

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