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Eight reasons why diesel car sales are collapsing

By Paul Connolly

New car sales in the UK have fallen for the first time in six years, with the demand for diesel-engined cars taking by almost one fifth.

Around 2.5 million cars were registered in 2017, down 5.7% from the year before.

But diesel sales collapsed by 17.1%, triggering fears that this will accelerate in 2018.

This is despite the fact that the latest diesel engines are low emission and the healthiest ever.

The slump in new car sales isn’t a surprise given that sales had increased for six years, and the two years previous years producing record new cars sales figures.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, says of new car sales: "We need to put it into context. This was still the third best year in a decade and the sixth best ever."

But it is the diesel sales slump which will concern manufacturers more. Although diesels are emitters of noxious fumes, they are low carbon emitters compared to petrol and are vital in meeting carbon emissions targets imposed on the industry by the EU.

Worryingly, CO2 emissions from new cars increased last year for the first time in two decades, rising 0.8%. If this trend continues, it could start causing problems for the ‘de-carbonisation’ of the UK economy.

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So why have diesel sales slumped at this time? Here are eight reasons to help put the figures in context.

1. Thousands of needless deaths

Diesel engines pump out the vast majority of nitrogen oxide gases coming from roadside sources.

It is estimated that up to 30,000 people in the UK die prematurely through illnesses caused or aggravated by noxious fumes and diesel particulate soot. There are other sources of these gases, but road-generated make up a large percentage.

Plus, people living near major roads are disproportionately affected by inhaling noxious fumes. There is growing public recognition of this issue, and an acceptance diesel will be taxed accordingly.

2. Dieselgate

When Volkswagen was caught rigging its diesel emissions figures in the US and elsewhere, confidence in diesel and indeed in motor manufacturers generally took a dip.

Diesel has never recovered in the public perception and indeed, there is widespread mistrust in all engine emission and efficiency data

3. The new diesel levy

In November, the Chancellor slapped a one-off tax increase on new diesel cars, starting in April. This is levied on all diesels that do not meet the Real Driving Emissions Step 2 target, the latest, and toughest, target.

Most new diesel cars would be hit using emissions bands. So, to give two estimated examples, there would be a £20 extra tax on a Ford Fiesta – and £400 extra on a Land Rover Discovery.

4. The state of the economy

Declining business and consumer confidence have dented the new car market. Brexit uncertainty hasn’t helped either.

This has combined with 1, 2 and 3 above to add a further trigger point to diesel’s decline

5. Diesel prices

The big switch to diesel was during the Labour years under Tony Blair, mainly aimed at reducing the UK’s carbon footprint.

Diesel was at that time significantly more expensive than petrol per litre; Gordon Brown then switched track, and for the past decade diesel has been more expensive than petrol, and that’s not going to change.

6. Scrappage

All major manufacturers now have scrapage schemes, with some offering significant savings of around £5k off replacement new cars.

This has helped to intensify the ‘rush from diesel’ and the enhanced the fuel’s dirty/costly reputation (even though new engines are exceptionally clean compared to older cars, leading to complaints that the anti-diesel backlash is actually short-sighted and counter-productive).

7. The rise of hybrid technology

Petrol-hybrid engines are becoming increasingly popular, rising to over 115,000 units last year with an even bigger rise certain in 2018 as manufacturers honour their commitments to make more. 

Whilst there are a small number of diesel-hybrid engines, the current backlash will probably ensure little or no investment goes into diesel-hybrid technology and it will wither on the vine

8. The coming electric car revolution

Slowly, remorselessly, electric cars like the Nissan Leaf and the Kia Soul EV are gaining popularity. Sales are still low, though.

In the past year, just 13,000 of UK sales were all-electric. But extended ranges and battery life, and sexy new models like the Tesla, mean the electric revolution is finally getting going.

By 2019 or 2020, electric engines will start taking proper market share, further ensuring the diesel doom-loop.

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