Good News for Diesel Vehicles

Amid growing clamor over climate change and emission control, the future of automobile industry is said to be electric. Given this, it is natural for enthusiasts and traditionalists to be concerned about what future holds for all-powerful diesel and petrol vehicles. In news that could make a lot of such enthusiasts glad, the diesel engine could live on for another 20 years and petrol for 30 years. And this has come straight from a man who’s right in the thick of action, BMW’s chief technical officer Klaus Froelich. These comments were made at the NextGen event in Munich.

Here is why Klaus thinks that diesel and petrol cars will live on for much further  

A best assumption of 30 percent of electrified sales by 2025 means that at least 80% of our vehicles will have an internal combustion engine. We see areas without a recharging infrastructure such as Russia, the Middle East and the western, internal part of China so they will rely on gasoline engines for another 10 to 15 years. The shift to electrification is over-hyped. Battery-electric vehicles cost more in terms of raw materials for batteries. This will continue and could eventually worsen as demand for these raw materials increases.

Our analysis shows that Froelish’s comments are based on two facts and are applicable to India as well:

1. Use of electric cars requires extensive charging infrastructure that is missing in most parts of the world, including India. It will take years before such an apparatus can be developed to replace petrol and diesel stations. So, a shift toward electric cars will likely take a couple of decades at the very least.

2. The market is yet to get the pricing strategy right for electric cars, The cost of batteries powering such cars is very high, rendering them unviable for the general public. The material used in batteries lithium, cobalt, etc., are already in limited supply. If the electric cars gain currency in future, it will only amplify the demand for these materials and the battery cost will go up.  

Coming to India, our government is also planning to bet big on the electric car industry. A government think-tank has proposed that all small capacity two-wheelers sold in India should shift toward electric power by 2030. Opposing the move, Indian two-wheeler giants such as Bajaj Auto and TVS Motors have already declared that such a deadline is impractical. The government is also working on increasing subsidy to electric vehicles to encourage their use. It also plans to establish charging stations for electric vehicles across the country. However, all these measures are yet to hit the ground though.

Coming to petrol and diesel engines, the proportion of these engines powering modern cars is likely to start a steady decline from now on. Even BMW is dumping the big V12 twin turbo petrol engine and is likely to replace it with a V8 petrol hybrid powertrain. This is likely to play out with diesel engines as well and hybrids are likely to become more common than ever. So, expect mild hybrids and full hybrids to dominate roads for the next decade or so, even as electric vehicles try to catch up.

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