Reflecting on the implications of the still evolving Volkswagen emissions testing scandal (“a vehicle emissions scandal of unprecedented proportions”), analysts at Lux Research suggest that one outcome of the crisis could be an aggressive push by Volkswagen to accelerate the push towards plug-in hybrids and electric vehicles.
VW was slowly moving beyond conventional gasoline and diesel engines anyway, Lux noted, with plans of putting out 20 more plug-in vehicles by 2020 (earlier post)—such as the production version of the Audi e-tron quattro. (Earlier post.) Volkswagen has also invested in next-generation batteries, including lithium-sulfur and solid-state. (Earlier post.)
VW is actually in a strong position to innovate their way out of this mess. They have been spending most on the R&D of any OEM (about $11 billion in 2013), and they are the largest automaker by volume. Arguably, no major OEM is better positioned than they are to decisively accelerate the push towards plug-in hybrids and electric vehicles, putting the shine back on their tarnished image. However, they probably lack the vision, leadership, and ambition to do it, so they will most likely carry on as usual after some apologies.—Lux Research
Other outcomes projected by the Lux team include:
Regulators will try to improve, but will need better equipment. It’s striking, Lux said, that the US EPA, with its $8-billion budget and workforce of 15,000 staff, couldn’t catch VW, but a small team of researchers from West Virginia University could. Lux suggests that regulators need to revise their testing protocols for real-world performance.
Automotive software will come under pressure to open up. OEMs have in the past successfully lobbied regulators to use the Digital Millennium Copyright Act (DMCA) to keep OEM software locked up and proprietary, and off-limits to diagnostic and repair companies the OEM does not like. The EPA has sided with OEMs, fearing that if the software is open-access, then consumers would modify it at the expense of emissions. VW misused the protection of the DCMA to the software cheat, Lux said.
Diesel passenger vehicle sales in the US will drop drastically. Due to strict NOx emission standards in the US diesel passenger vehicles have failed to make any significant market penetration, representing less than 1% of passenger vehicles and only 3% of all vehicles on the road. In part, slow adoption was due to the requirement of installing the urea-containing SCR unit to control NOx emissions in diesel engines, which is expensive.
AdBlue systems and renewable diesel will infiltrate Europe’s existing diesel passenger vehicle market. The Euro 5 NOx emission standard that is applicable to vehicles prior to 2015 is nearly six times more lenient than that in the US (180 mg/km compared to 31 mg/km). This has resulted in diesel powertrains present in approximately 35% of passenger vehicles and 53% of all vehicles and biodiesel making up 62% of Europe’s biofuels market.
With Euro 6 approved and increased attention to NOx emissions (80 mg/km), and implementation of AdBlue systems in diesel passenger vehicles, it’s truly inevitable to achieve “clean diesel”, Lux said. While biodiesel has carbon emission benefits that’s been the primary focus of Europe’s biofuel mandates, it can have higher NOx emissions—up to 10% depending on blend percentage.
With the push for nonfood biofuels and new focus on NOx emissions, Europe offers potential for renewable diesel growth. Renewable diesel has been shown through third-party testing to emit up to 9% less NONOxx compared to conventional diesel, and the region will see nearly 300 million gallons per year (MGY) of capacity come online by 2018, nearly doubling what it is today, according to Lux’s Alternative Fuels Tracker.