Diesel vs Hybrid - the Battlelines are Drawn

A fascinating technological battle is being fought by global automotive manufacturers. The battle is for the territory of lower emissions and improved fuel economy, but it’s the weapons of choice that make the outcome significant for all cars.

In one corner are the Europeans, exponents of the diesel engine as the technical panacea that will vastly reduce world car fuel consumption and dramatically cut greenhouse gas emissions. Already, diesel-powered cars account for more than 40 per cent of new car sales in Europe– and the diesels are incredibly economical. And in the other corner are the Japanese - especially Toyota - with their hybrid cars. These cars are so clean and frugal that when stopped in traffic, they have zero emissions and consume no fuel at all.

The technological solutions couldn’t be more different. On the one hand, refining the diesel engine that’s been around since 1897. And on the other hand, developing brand new technology that mixes electric power with near-conventional petrol engines.

The Japanese – while also selling diesel cars domestically and abroad – see hybrids as the only logical outcome. The Europeans – despite developing most of the breakthrough automotive technology of the last 40 years – regard hybrids as a dead-end and have no production hybrids on sale.

And curiously, the technology that ends up triumphant will be largely dependent on yet another geographical region – North America. In the United States, diesels currently make up less than 1 per cent of new car sales – and hybrids are only just now starting to sell in numbers above a handful. But when that huge market makes a decisive move towards either diesels or hybrids, the impact will be felt right around the world.

One of the greatest innovators in new car technology over the last 100 years has been heavyweight supplier, Bosch. And Bosch favours diesels. In a speech given in the US a few years ago, Kurt Liedtke, Bosch Board of Management member, made the company’s views very clear:

“I am here to convince you that the diesel engine is absolutely the most logical solution to today’s energy issues in the United States. I believe it with my heart, my soul ... and my brain.

“In Europe, diesels have quickly gained acceptance. Overall in Western Europe, diesels account for 39 percent of new car sales. And, if you take the new premium luxury sales in Europe, the number is higher...substantially higher at 70 percent.”

Liedtke said that if in the US diesels could by 2010 match the European diesel penetration of 40 per cent of new car sales, there would be some dramatic changes.

“[In the US] our overall consumption would drop by approximately 300,000 barrels per day, which equates to an annual savings of $9 billion. Our CAFE [Corporate Average Fuel Economy] shoots up to 28 miles per gallon ...which opens room to sell the larger, high-demand vehicles – the SUVs, wagons, luxuries and minivans. That’s a strong business case for diesel.

“And just look at greenhouse gas emissions. Since we’re using less fuel, our emissions will be directly and positively impacted. Annually, we will decrease our emissions of greenhouse gases by 5 million metric tons.”

A company such as Bosch has the capability to produce the control systems for any form of driveline – in fact, as the inventers of electronic engine management and major producer of electric motors and generators, it can be argued that they are potentially world leaders in the technology of hybrids. But are they interested in following that path? It doesn’t appear so.

Bosch’s Kurt Liedtke again:

“It is important to point out that the only options available today – meaning they could be on the roads as a viable solution for the majority of drivers in the US– are gasoline, diesel and possibly hybrid. This eliminates electric and fuel cell.

“[But] diesel technology exists, and it requires little change to the design of today’s vehicles.”

The most significant hybrid car currently available is the Toyota Prius. It was launched on the Japanese domestic market in late 1997, being followed in 2001 by an export model incorporating many technical under-skin changes. The third model - the current car - incorporates major technical and visual changes and was launched in 2003.

The Toyota press release for the first Prius makes clear the company’s ambitions and philosophies:

“The Prius is the result of the efforts of Toyota designers and engineers to create a harmonious balance between the costs and benefits of motorization for the individual, society, and the earth. The Prius, therefore, is part of the answer to global environmental concerns, such as CO2 reduction and energy conservation, while it still preserves the convenience and pleasure of driving.

“The revolutionary Toyota Hybrid System (THS) that powers the Prius achieves outstanding fuel efficiency and cleaner emissions, while it provides highly responsive performance and smooth acceleration. Moreover, the Prius, with its futuristic packaging and design, ensures comfortable cabin space and a high level of active and passive safety features, thus epitomizing all that a twenty-first century car should and will be.

“By focusing on energy conservation and the reduction of CO2 emissions, which is blamed for global warming, the Prius achieves nearly twice the fuel efficiency of conventional gasoline engine cars and cuts HC, CO, and NOx emissions to about 1/10th of the amounts set by current pollution regulations.

“TMC [Toyota Motor Corporation] has designed the Prius with recyclability in mind in order to achieve a goal of 90% recyclability by weight by the year 2000, and has taken assertive steps to reduce environmentally harmful substances such as lead.”

At its announcement that it would produce an export model Prius for North America, Toyota said it wants “to be to the environment what Volvo is to safety and Rolls-Royce is to luxury.” Of its annual R&D expenditure of US$6 billion, Toyota committed over US$1.2 billion in R&D of alternative power sources – a greater amount, the company said, than the total R&D budget of some other carmakers.

In addition to the Prius, Toyota is producing other cars – including domestic ‘mild’ hybrids – and expects to shortly expand its range of hybrid cars.

Honda has also invested heavily in hybrid technology, producing the Insight (a dedicated hybrid car) and hybrid versions of its Civic. Honda also has plans to expand its hybrid model line-up in the next 12 months.  

But if the Japanese manufacturers are spending so much developing hybrid technology, why is Europe ignoring it?

Bern Bohr, Chairman, Business Sector Automotive Technology of Bosch, in a recent interview published in Automotive News Europe, says:

“Hybrids have their advantages in regions where you do a lot of brake energy recuperation and a lot of stop-and-go, say in metropolitan areas.  And they are stronger where there is not a diesel heritage. If you roll that together, for Europe we see hybrids remaining a niche application. In Japan, on the contrary, with a lot of metropolitan driving conditions, stop-and-go and no diesel heritage, [we expect] a high market penetration for hybrids.”

However, far from not having a diesel heritage, Japanese manufacturers are long-standing producers of diesel cars. In fact, in 2003, Toyota had a 4 per cent share of the diesel passenger car market in Europe– the same as BMW.

However, it’s in the United States where the battle will be played out, with government legislation likely to be a major factor in the outcome.

“In the US, if it’s decided just on technology and on cost-benefit relationship, and there is no political influence, we would see a much higher penetration of the diesel than of the hybrid,” Bosch’s Bern Bohr says.

“[But] what we don’t know is what the legislation will do. If we have legislation that is biased towards one technology, like giving tax breaks only to hybrids and no tax breaks to diesels - even though the CO2 reduction is the same - that would definitely influence the scenario.”

Lawrence Burns, General Motors Vice President, R&D and Planning, also has concerns about legislation.

“I think governments need to set the stage for creating an enabling capability for technology to lead the markets to the answer,” he says in a recent interview published in the Ricardo Quarterly Review. “I don’t think they should be forcing the solution.”

Bohr says the downsizing of the petrol engines in hybrid cars is well suited to countries with lower speed limits, but on a German autobahn, higher engine power is needed.

“So the open question is: which way will the US market turn?” he says. “Europe is clear, Japan is clear.”

The answer is likely to play a major part in determining the sort of cars that we’re driving ten and twenty years from now.