VW CEO predicts a comeback for diesel technology

The popularity of diesel-powered vehicles have been on the decline ever since the Dieselgate scandal erupted in September 2015. This has led Toyota to completely stop sales of its oil burning models in Europe, but Volkswagen CEO Matthias Muller seems to think that the technology will make a comeback.

According to the Detroit News, Volkswagen is expecting consumers to “forgive and forget” soon, as cleaner diesels hit the streets. “Diesel will see a renaissance in the not-too-distant future because people who drove diesels will realise that it is a very comfortable drive concept,” explained Muller. “Once the knowledge that diesels are eco-friendly firms up in people’s minds, then for me there’s no reason not to buy one.”

That’s quite a bold statement, considering that the German auto giant put aside about US$30 billion (RM117 billion) in provisions to cover fines, retrofits and legal costs after it was caught rigging diesel-emissions systems to dupe government pollution tests. The move even saw former VW exec Oliver Schmidt, who was the company’s emissions compliance manager from 2012 till February 2015, sentenced to seven years of imprisonment and slapped with a US$400,000 (RM1.63 million) fine.

“We need diesel to get to the CO2 goals,” said chairman of the board of management of Volkswagen, Herbert Diess, after presenting the all-electric I.D. Vizzion concept car in Geneva. “Electric vehicles in many cases won’t keep frequent drivers happy,” he added.

Recently, a German court ruling allowed cities in the country to ban the most heavily polluting diesel cars from their streets, to which Diess responded by saying that it’s “scary and totally unnecessary.” Similar decisions to clamp down on diesel cars have been made by other countries like Paris, Madrid and Mexico City. China, France and the U.K. have also put in place plans to phase out the internal combustion engine for good.

However, Volkswagen isn’t the sole believer in the diesel renaissance. According to Automotive News Europe, Ford is still backing the technology, but the uptake will disappear in some segments, notably for smaller vehicles, the company said.

European carmakers are keen to stick with diesel as an effective and profitable way to meet regulatory demands to cut CO2 output until demand for zero-emissions electric cars takes off. German manufacturers are particularly exposed because they generally make larger, more powerful models. Daimler, the maker of Mercedes-Benz, said its CO2 fleet emissions rose last year because buyers opted for larger cars.

Automakers in the EU need to lower fleet emissions to an average of 95 grammes of CO2 per km by 2020-2021. Meeting those goals has gotten tougher as demand for diesel cars – which emit about a fifth less CO2 compared to equivalent gasoline vehicles – has slumped amid consumer worries about driving bans in the city.

Despite the dip in diesel’s market share in Europe, Mueller is predicting a comeback. “The rules of the game in the EU in relation to climate protection and emissions goals on CO2 are so challenging that governments cannot do without diesel,” he told reporters, adding that Volkswagen won’t miss the targets the EU has set. “We are doing everything to avoid” coming up short, he said. “If there is less diesel, then getting to that goal just gets tougher.”

Last year, Volkswagen pledged to spend more than US$42 billion (RM164 billion) through 2022 to develop battery-power and autonomous-driving technology, and it has plans to create electric versions of all 300 cars, trucks and buses sold by its dozen brands by the year 2030.

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