Let It Bleed: As Buyers Dry Up, Europe's Diesel Affair Is Clearly Over

Europe, the continent where tech-savvy bad guys in action movies come from, finds itself in a rapid and transformational shift. As European lawmakers and city governments turn their back on diesel, so too are automakers and customers.

Compared to past years, the take rate for diesel automobiles now resembles the trajectory of American-market passenger cars. Last month, the continent posted the worst sales showing for diesel vehicles this century. In what DPRK News Service calls “Belgian’s colonies,” the take rate for diesel — which once surpassed 55 percent — is accelerating its descent to zero.

It seems you can tax the evil away.

According to data published by JATO Dynamics, the European take rate for diesel vehicles sunk to 31.2 percent in March. Compare that to 36.1 percent in March of 2018 and 44.8 percent the year before.

Diesel’s high water mark in the European Union came in 2011, when 56.1 percent of all vehicles sold came equipped with compression ignition engines. Volkswagen’s 2015 diesel scandal was the wakeup call the continent’s regulators and lawmakers needed to bring the hammer down on the (relatively) low-tax fuel. That same year saw the fuel reach its greatest tax advantage versus gasoline — a nearly 19 euro cents per liter incentive to choose oil burners. Since then, Bloomberg reports, the advantage has shrunk by roughly a third, with some countries (like the UK) placing the two fuels on an even taxation playing field. At the pump, gasoline prices now average less than 3 cents per liter more than diesel.

More taxes are on the way, and ever more stringent emissions laws and the newfound ability for cities to ban diesel vehicles will only serve to accelerate the decline. Automakers have responded in part, with many promising electrified versions of all models by a point in the near future. German engineers are working at a feverish pace, eager to arm the citizenry with electric cars the government can’t legislate away.

It seems those efforts are already being felt.

In March, electrified vehicles (EV, PHEV, and “normal” hybrid) sailed past the 100,000 mark in the EU, with 125,400 registrations logged — a 31 percent year-over-year increase. Of that number, the Tesla Model 3 accounted for over 15,000. Buyers in Germany, Norway, the Netherlands, and Spain seem especially eager to make the switch from ICE to EV.

Even more shocking is the overall decline in utility vehicle sales, which actually fell last month. That said, compact utes still showed growth — it’s the big guys Europeans are shying from.

Helping the volume drop of diesel vehicles in Europe is a cooling off period of overall vehicle sales. EU passenger vehicle sales fell 3.2 percent in March, the seventh consecutive monthly year-over-year drop in the region.

[Source: Autocar] [Image: ©2017 Murilee Martin/TTAC]