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January 23, 2008

Clean Diesel cars now available - but high performance comes at a cost

This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Jeff Moser
President, West Branch LLC
Implications: Automotive OEMs are scrambling to introduce new diesel models that offer the needed 35 mpg while meeting the same strict emissions standards as the gas powered competition.  Advanced emission control technologies make modern diesel cars as clean as gas while lowering greenhouse gas emissions and increasing fuel economy.  These emission controls come at a cost and consumers must compare cost/benefit vs. hybrids and E85 options.

Analysis: As of 2007 the EPA emissions standards for new cars eliminated any distinction between gasoline and diesel engines.  The so-called 'Tier 2, Bin 5' requirements mean that dramatic reductions in Particulate [soot] and smog-causing NOx emissions are required on new diesel cars and trucks.  All trucks sold in 2007 and beyond now are fitted with Diesel Particulate Filters that remove over 90% of all soot from the exhaust.  These DPFs are coated with Precious Metal catalysts, driving the sticker cost up near $100 per engine liter plus associated electronic controls and sensors. 

Larger trucks will not require special NOx catalysts until 2010 but cars must meet the Tier2/Bin5 limits now.  Mercedes has been marketing their 'Bluetec' systems which feature Selective Catalytic Reduction [SCR] catalysts in addition to the DPF.  SCR normally requires addition of Urea to the exhaust; cars will likely use a refillable Urea canister that is serviced at oil change intervals.  Today's Bluetec system on the E-series Mercedes eliminates the need for separate Urea supply by combining an additional NOx Trap catalyst.

Modern diesels offer tremendous driving satisfaction with their low-end torque performance and higher fuel economy.  Sticker prices are typically $1K - $3K higher than comparable gasoline models and consumers must decide if the fuel savings is worth the price.  [Compared to hybrid cost adders diesels fare well in most scenarios.]  

More OEMs plan to introduce Clean Diesels with 30 - 40 mpg; market share is sure to follow once consumer acceptance spreads.


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