Europe's Diesel Decay Set to Accelerate in VW Cheating Fallout
This article by Elisabeth Behrmann and Tom Lavell for Bloomberg may be of interest to subscribers. Here is a section:
Diesel cars’ popularity in Europe has been waning as Volkswagen’s emissions-test manipulation scandal, which emerged in late 2015, compounded concerns that pollutants from the fuel are outweighing the benefits of its lower CO2 emissions. Mercedes outlined plans last week to accelerate a rollout of battery-powered cars by 2022, saying combustion engines would continue to be refined only for a transitional period.
“Diesel’s share in Europe has been declining for years because of stricter emissions regulation making the technology more expensive,” and potential restrictions on the models in cities such as Munich will probably damp sales further, Thomas Schlick, an automotive consultant at Roland Berger, said by phone. “The longer-term implications for a drop in combustion- engine demand are significant for the industry as by our calculations about one-third of jobs in the auto industry are related to drive-train technology.”
The German automotive industry received a robust defence from Angela Merkel when the diesel cheating scandal broke. That means the sector has been given ample time to transfer away from what is a serious polluting influence on major cities not least in relation to nitrogen oxide emissions. If they are to now meet the strict emissions controls which we can expect will be enforced then more efficient internal combustion engines, hybrids and electric vehicles are inevitable.
Volkswagen has returned to test the region of the trend mean and will need to continue to hold the €130 area if recovery potential is to be given the benefit of the doubt.
BMW fell less and has firmed more impressively from the region of its trend mean.
Meanwhile Ford pulled back sharply last week from the region of the trend mean and despite some loss of momentum remains in a medium-term downtrend.
Tesla moved to a new high today on stronger than expected deliveries and surpassed Ford by revenue.
Sensata Technologies collapsed with Volkswagen during the diesel crisis but has held a progression of higher reaction lows since early 2016. The company specialises in automotive sensors and it needs to hold the $40 if that sequence is to remain intact.