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VW Scandal Will Speed Up Diesel's Demise

VW Scandal Will Speed Up Diesel s Demise Bloomberg View

VW Scandal Will Speed Up Diesel s Demise Bloomberg View


The Volkswagen emissions scandal has broader implications than the potential damage it can do to Europe's biggest carmaker. It's the result of Europe backing the wrong emissions-reducing technology on a regulatory level. There is now an opportunity to reverse that error and force the continent's сar manufacturers to concentrate on hybrid and electric vehicles. They've got the technology and resources to reshape the market.

The scandal is about VW's bad business decision to cheat testing equipment so it could rush new engine models to market in the U.S. It is also about a failure of regulatory oversight and testing technology. Most of all, however, it's about diesel engines: They were the ones performing so badly on the tests that VW engineers had to look for a workaround so marketers could trumpet the advent of "clean" diesel. 

VW had an advantage in diesel technology, which it wanted to leverage in the U.S., for a reason. In the mid-1990s, the European Commission and European Union member countries' governments started a campaign of massive intervention to stimulate the use of diesel engines in cars. At the beginning of that decade, Europe and Japan had about 10 percent of diesel automobiles on the road. After 1995, the trends diverged widely:


The French authorities have now realized this. It would have been hard not to: Paris now has a smog problem, which it didn't have in the 1990s. "In France, the diesel engine has long been privileged," Prime Minister Manuel Valls told an environmental conference in November, 2014. "That was a mistake." The government now wants to move toward a diesel ban, which will force Renault and Peugeot to make a difficult transition since about two-thirds of the cars they now sell in Europe are equipped with diesel engines.

Stashed in: Ecology!, Cars!, VW

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