Diesel – To Buy Or Not To Buy?

Diesel hasn’t been that popular in the US and the introduction of hybrids will further reduce their popularity. In Europe, the laws requiring low-sulfur refining for gas made gas more expensive, which has in turn made diesel more attractive. The return on diesel is about 30% better than gas so the same liter gets you more bang for your buck.

The current result of all this is that Diesel is only 3% of the US car market. That might change though, the Diesel Technology Forum have quoted a survey that 40% of the populace would buy diesel. About 10 years ago it was a mere 13%.

According to fueleconomy.gov diesel is 20-35% better than gas power as far as emissions are concerned. Diesel and gas produce similar combustion, only diesel can do so at lower temperature. As a result, spark plugs are used to assist in a gas-powered car. This makes the diesel engine much more efficient.

The elephant trap with diesel is that the US has an emission standard which diesel engines find hard to match. The effects of diesel are more noticeable with the increased engine noise and engine odor. In other words, diesel is technically a little cleaner to operate but smells and looks worse.

Resale

Another reason not to buy is the price. Although diesels cost $2,500-$4,000 more (depending on the model) they seem to hold their value. Even if a diesel lacks spark plugs finding other spare parts may prove costly on the wallet.

Why do they store value better? Because they tend to run to much higher milage. For the vehicle to pay you back you need to keep it for more than five years, providing you use it on highways.

What about Traveling across the Country?

On long trips it can be tricky to find places to fill up your diesel tank. On the other hand, semis are almost all diesel so there are plenty of places to fill up in you’re willing to look. So travel isn’t a reason to prefer gas.

Does Type of Car Matter?

Diesel cars tend to have a strong Alpha Male appearance, so the US market, with their love of Pick-up trucks, may embrace non-gas pickups and off-road vehicles more than commuter or sports cars.

It’s not just cars, people seem to prefer gas powered vans. The Ford Transit was gas powered in the US but diesel powered everywhere else. As of 2011, an electric version might seem to supersede the gas and diesel versions, but it didn’t catch on.

What About Hybrids

There’s a lot of political pressure to reduce our use of fuel overall, which means EV’s or Hybrids. It could be a moot point which is better between diesel and gas, someday. BUT we’re not there yet.

The main reason why car companies continue to produce diesel instead of hybrid is due to cost. Retooling factories is expensive and EV’s and hybrids represent a huge cost compared to just refining the current models. Car makers do make large scale changes to their models but most of their “new models” are really just minor tweaks to the previous year. Why fix what aint broke? Especially if it’s really expensive. The consumer also wins in this scenario because the cost of retooling passes onto them. Consumers like feeling like they bought a brand new design at the cost of a car that’s been in production for 5 years.

So long-story-short, car companies are embracing EV’s and hybrids, just at a pace more inline with the natural attrition of their factory equipment.

This is where we see start up manufacturers like Tesla grab market share because they have the same outlay of money to build a factory regardless of the type of car they’re going to make.

As long as hybrids cost to make for the big traditional automakers we wont’ really know how popular hybrids are because they cost more than an equivalent gas or diesel, without the advantage of longevity diesel has. Fuel prices are another factor. If gas continues to rise in price people will start to look for relief. Only time will tell if they’ll buy more diesels or more hybrids.

Only when prices go down for hybrids and they become more mainstream does it become a fair economical comparison and gas prices are going to completely throw the numbers off.

With cars makers like Ford making an f-150 hybrid and the Toyota making a Tundra hybrid even our assertion that diesel might become more popular in US pickup trucks is in doubt. You’d think of, due to their off-road nature and the torque diesel would find a home.

In Conclusion?!?!

What’s all this macroeconomics, and trend projections got to do with the question: “Should I spend the extra up front to get a diesel or just by a gas car?”

Well, a lot, really. The big plus to diesel is the high mileage they might go to, the fuel economy (dollar for dollar) and the overall reliability. Altogether making diesel an easy win if your intention is to buy it and drive it until, and long after, its paid off. Which isn’t a good idea if diesel become rare or hard to find in the next five years.

Are we really saying Diesel manufacture could drop?

If demand drops it could happen, and it doesn’t have to go away completely to become a problem. If Supply drops due to low market demand, then price will go up. Fewer stations will carry it and your like-new Merc that was going to hold most of its value is suddenly an expensive lawn decoration.

Factors that might impact the Future…

Gas powered ICE (Internal Combustion Engine) cars seem to be the obvious poorer choice and should fade away, even in America. However, gas cars are the majority of the market still. They may continue to be the cheaper upfront purchase for a long time, where diesel is basically battling for its share of the slightly higher initial price vehicle market with hybrids. Making it more likely that one of those two competitors will get shoved out.

Bottom-line, gas-powered cars in the US will not go quietly into the good night. The will linger and likely cause upcoming laws banning them to be shoved off several times before they are entirely replaced.

The EV Factor

EV’s might continue to be the most expensive upfront vehicle as many people see it as the only full hedge against rising fuel prices. So, it’s likely that the part of the market that finds hybrids attractive would be at least as attracted to an all-electric vehicle (EV). In which case, hybrids are battling on two fronts.

Ironically if the laws currently working their way through the process succeed in banning the sale of new ICE cars by 2035, and everyone buys an EV, the cost of electricity will sky-rocket. Basically, your car will burn the same fuel as you heat your house and cook with—talk about demand.

EV’s can have a torque and traction advantage over ICE trucks, but until recently EVs have stuck the commuter market. One reason might be it’s the biggest slice of the market. Another, more likely, reason is the low range on EVs. It’s unlikely EVs will ever make inroads with the offroad market. Trucks like Tesla’s Cybertruck are marketing to an urban consumer.

So, the most likely outcome for EV’s is a steady rise in market share at the high (but not luxury) price point.

The Hybrid Factor

It’s unfortunate that US Automakers went all in on hybrid model cars because their future is the least bright. Too much competition, and most importantly the laws banning ICE vehicles have, for the most part, failed to exclude hybrids.

It’s also sad that Hybrids are likely doomed because from a sustainable and practical standpoint hybrids are the clear winner. When you combine emissions with the amount the toxic batteries going into landfills, hybrids have the best blend of upside with the minimal downside.

The Diesel Factor

Obviously if legislators can’t be bothered to differentiate between a gas ICE car and a hybrid car they can’t be bothered to exclude diesel from their ban.

Diesel has a couple opportunities to battle back. First, as already mentioned diesel is technically cleaner. There’s a chance that will count for something, some places, if not everywhere. Second, diesel engines easily convert to handle “bio-diesel” which should make the environmentalist lobby a little friendlier to them. But there isn’t a lot of real science (or thought) going on inside most of these lobby groups.

The Likely Deciding Factor

Range! How far can you go without stopping? This is pretty basic, but somehow EV marketing has done a great job of misdirection. Don’t look at the fact that our cars only go 300 miles and take a long time to recharge. Don’t think about how annoying it is your year-old cellphone has to be charge by 2 PM. Pay no attention to the lithium strip mining of the 3rd world or the landfills piling up with toxic batteries.

Sorry, forget that last part. The question will soon be, how far do you need to go?

You should look at the economics to see which vehicle is best. A diesel can go for 600 miles without stopping for a new fill-up. It’s most likely that suburban shoppers will demand to keep using gas cars, or switch to EV’s, while urban shoppers will transition to public transportation. This will leave diesels with an open market in the rural, and offroad markets.

BUT, as said earlier, if you constantly change vehicles gas may be better value in 2022 and 2023. But otherwise, why not go for diesel?

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