The Coming of Clean Diesels

Get ready, America: Diesel cars and trucks are cleaner than ever, and they're coming to a dealership near you

In Field of Dreams, actor James Earl Jones tells Kevin Costner's character that if he tears up his cornfield to build a baseball field, "the people will come…they will surely come." The memorable phrase most people recall is, "If you build it, they will come."

Automotive journalists and automakers, not to mention many consumers, are so enthusiastic about diesel-powered cars that the same confidence that got that fictional baseball field built in the middle of Iowa will help bring a slew of diesel options to American car buyers in the next five years.

Despite the growing attention and agendas to promote diesel cars, though, some automakers are more enthusiastic about marketing them than others. That's because American car buyers are showing a lot more interest in gas-electric hybrids than in diesel-powered vehicles, which they associate with smoke-belching trailer trucks. But because diesel fuel available in the U.S. has become a lot cleaner and automakers have figured how to prevent most of the pollution from such engines from entering the atmosphere, several companies are planning to push new diesel technology on the U.S. public in the next three years. The hope is that it will rival the popularity and demand of hybrid technology.

Some Uncharted Territory

German companies have been pushing diesel ahead of Asian and U.S. automakers; they have already made big diesel investments to satisfy the European market where some 45% of new vehicles sold are diesel. But last week, General Motors (GM) Vice-Chairman and Chief of Product Development Robert Lutz announced an ambitious new plan for diesel cars. GM plans to show a new diesel engine, on a new hybrid system called e-flex, at the Frankfurt Auto Show in September.

In GM's e-flex power train, a traditional diesel or gasoline engine recharges a battery pack that provides power for an electric motor. GM will show the same system at the Detroit Auto Show in January on a Saturn Aura. The GM diesel engine is expected to go into the European Opel Vectra in 2008 and into a Saturn in 2010.

One of the obstacles to pushing diesels is that not all 50 states have the same standards for diesel-powered cars. And GM's system, unlike the new systems of Mercedes-Benz, Volkswagen (VOWG), and Audi, are not accepted in every state. "There's a lot of hype on diesels right now. It's not going to be a 50-state solution [for GM]. It's going to be minus California, and minus what other states adopt California standards," says GM's Lutz.

Generation Gaps

Up to now, German and U.S. automakers ceded leadership in the hybrid arena to Toyota Motor (TM) and Honda Motor (HMC), in large part because those systems are costly for manufacturers to build and for consumers to buy. Meantime, since companies including Mercedes and GM have had to develop clean diesel technology for Europe in the last decade, they have been anxious to make a case for diesels in the U.S. to maximize their investment. Lutz says GM is charging ahead: "We're doing a bunch of them right now. We will be introducing diesel passenger cars in the U.S. We are going to have a V6 diesel engine for passenger cars, crossovers, and light trucks."

The nationwide introduction of ultra-low-sulfur diesel fuel in October, 2006, is enabling a new generation of efficient, clean diesel engines and emissions after-treatment technologies, which reduce emissions of particulate matter, or soot, by more than 90% and of oxides of nitrogen by about 50%. There are expected to be at least 15 diesel cars on sale in 2010. Global Insight, in Lexington, Mass., says this year automakers are expected to sell 465,000 diesel-powered trucks and commercial vehicles in the U.S. and 10,000 cars. By 2011, the firm forecasts companies will sell 750,000 diesel trucks and commercial vehicles and at least 100,000 cars.

Mercedes Moxie

Mercedes-Benz became the first company to make the newest generation of clean diesel fuel. The German luxury brand calls its system Bluetec. It's only been on sale in 45 states this year, but it is modifying the system for all states for 2008. The E320 Bluetec achieves fuel economy of 30-35 mpg in most driving conditions—impressive for a luxury sedan. To meet the more stringent emissions standards in California, Maine, Massachusetts, New York, and Vermont, the 2008 E320 will rely on an additive called AdBlue. The tank of AdBlue will have to be replenished when a dashboard warning light is illuminated.

Though Mercedes-Benz recently parted with its Chrysler division that was part of the former DaimlerChrysler (DCX)—Daimler will retain 20% of the company once the sale of Chrysler to Cerberus Capital Management clears—Chrysler will continue to benefit from sharing the diesel technology. Chrysler this year is selling clean diesel versions of the Grand Cherokee and Jeep Liberty, which share the Bluetec technology. In Europe, the 300C sedan and Dodge Magnum are offered in diesel versions, and the company is trying to make a business case for offering them in the U.S. as well. And in 2010, Chrysler will offer diesel engines that are now only available in heavy-duty trucks to buyers of its basic Dodge 1500 pickup truck. The boost in fuel economy will be 25%.

Honda Weighs In

For its part, Honda plans to meet the California standards without additives. Honda, which has as "green" an image as Toyota, has not been a fan of diesel engines until recently. But, forced to develop one worthy of Honda's environmental standards for Europe, it is now more bullish on diesels in the U.S. than it is on gas-electric hybrids. While Honda's Civic Hybrid has been reasonably successful, though not as successful as Toyota's Prius, it has canceled plans for a new version of the Accord hybrid when the current model is redesigned. Look for a Civic diesel in 2010, and likely diesel versions of CR-V and Pilot SUVs after that.

Honda's attitude is that hybrids are best suited for people who do a lot of city driving. Indeed, gas-electric hybrids get better mileage in the city than on the highway. For people who do a lot of highway driving, it believes a diesel is the wiser choice for fuel savings.

Honda's diesel push should boost acceptance in the U.S. The assumption by other automakers is that people will think diesels are environmentally sound if Honda is selling them. The automaker significantly boosted its business in Britain during the last two years with an award-winning ad campaign for its diesel engine, featuring the voice of U.S. writer and public radio personality Garrison Keillor. There is hope among diesel enthusiasts that Honda's green reputation will make it easier for other automakers to sell the technology to a reluctant public.

Defining Diesel

Why diesel? Diesel is quite different from regular gasoline; they are different products that both come from the refining of crude oil. But diesel contains heavier hydrocarbons with a higher boiling point than gasoline. The generic term "diesel" refers to any fuel mixture developed to run a diesel-powered vehicle, or compression-ignition engine (that is, an engine that does not use a spark plug to ignite the fuel). Such cars can also run on biodiesel, which some people—serious diesel enthusiasts—make in their garage out of used vegetable oil, like that from deep fryers at fast-food restaurants.

Driving enthusiasts have long enjoyed diesel-powered cars for their power and torque. With higher fuel prices, the greater fuel economy is now also in demand.

Volkswagen has traditionally been the biggest seller of diesel cars, offering "TDI" versions of the Jetta, Passat, New Beetle, and Touareg in the past. VW has sold in excess of 30,000 diesels in some years. Its new "clean" diesel technology was not available for 2007 models, but that changes next year with new versions of the Jetta and Touareg, and there is talk of a Rabbit TDI, too. The Jetta should get 40-45 mpg, compared with 22 city and 29 highway for the gasoline-powered Jetta.

The fact that Volkswagen calls its diesels TDI, and has not even advertised the word "diesel," or put the word on the badging of its cars, speaks to how ambivalent consumers are about the label. "No question, the word diesel presents a problem for many car buyers," says David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. "It could be that we'd be better off marketing them as compression-ignition engines."

Shifting Consumer Perception

Volkswagen's sister Audi division has been pushing diesel in its own way. In 2006, Audi became the first car company ever to win the 12 Hours of Sebring and 24 Hours of Le Mans with a diesel-powered race car. Audi will launch a diesel version of the Q7 SUV in the U.S. in late 2008; it will boost fuel economy from the current gas-powered version by about 25%.

A lot of consumers will remain reluctant to buy diesel-powered cars because they do not understand them. Some will continue to associate them with black spews of smoke coming from the vertical exhaust pipes of trucks. Older consumers will recall poorly designed, loud, and glitch-filled diesel engines from GM that hit the U.S. market in the late 1970s.

But even environmentalists and regulators, previously hostile to diesel cars, say the new technology legitimates the new clean diesel as a rival to gas-electric hybrids for fighting city smog, global warming, and dependence on foreign oil. The California Air Resources Board, the toughest regulator of vehicle emissions in the country, for example, has made it possible for diesel cars to go on sale in its state again in 2008.

Consumers, however, will require a lot of education and advertising to see diesels as part of a green future rather than a black, sooty past.

Click here to see those cars that are winning the race for clean diesels.

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