BMW Boss – Diesel cars to live on for another 20 years: Here’s why he says this

In news that could make a lot of car enthusiasts glad, the diesel engine could live on for another 20 years, and petrol engines could live on for another 30 years. Now, that’s nearly a lifetime of driving for the average 20-30 year old, who’s just begun dabbling in the wonderful world of cars. And this is coming straight from a man who’s right in the thick of action, Klaus Froelich, who is BMW’s chief technical officer. These statements were made at this week’s NextGen event in Munich, the city that’s also the head quarters of BMW.

Here’s why Klaus thinks that diesel and petrol cars will live on for much further than expected (Via CarScoops)

A best assumption of 30 percent of electrified sales by 2025 means that at least 80% of our vehicles will have an internal combustion engine. We see areas without a recharging infrastructure such as Russia, the Middle East and the western, internal part of China so they will rely on gasoline engines for another 10 to 15 years. The shift to electrification is over-hyped. Battery-electric vehicles cost more in terms of raw materials for batteries. This will continue and could eventually worsen as demand for these raw materials increases.

So, Mr. Froelish’s statements are rooted in two important facts, and are very likely to be applicable for the Indian market as well.

1. Charging infrastructure in most parts of the world including India is nearly non-existent. And it will be years before charging infrastructure can replace petrol and diesel refuelig stations. So, a big shift towards electric cars will not happen quickly, and is likely to take a couple of decades at the very least.

2. The cost of electric cars is exorbitant, and this is mainly due to the cost of the batteries powering them. The materials that are used in this batteries – lithium, cobalt, etc. – are already in limited supply. High demand from electric cars will only amplify the demand for these materials and the battery cost is likely to go up, or stay where it is. This means that the cost of electric cars won’t fall quickly, making them unttractive to most buyers. So, unless new technology comes in that increases range and decreases the cost of batteries that power electric cars, a quick shift towards electric cars is unlikely.

The Indian government has set out some really ambitious targets for the auto industry. The government wants all small capacity two wheelers sold in India (read 100/125cc motorcycles and scooters) to shift towards electric power by 2030. Indian two wheeler giants such as Bajaj Auto and TVS Motors have already declared that such a deadline is impractical. The government is also working on increasing subsidy to electric vehicles, in the hope that more people opt for them. Road tax and registration charges are likely to be exempt for electric vehicles, bringing down their cost about 10 %. The government also has plans to establish charging stations for electric vehicles across the country. All these measures are yet to hit the ground though.

Coming back to petrol and diesel engines, the proportion of these engines powering modern cars is likely to start a steady decline from now on. Even BMW is dumping the big V12 twin turbo petrol engine (which powers its flagship 7-Series luxury saloon and Rolls Royce cars), and is likely to replace it with a V8 petrol hybrid powertrain. This is likely to play out with diesel engines as well, and hybrids are likely to become more common than ever. So, expect mild hybrids and full hybrids to dominate roads for the next decade or so, even as electric vehicles try to catch up.

In the Indian context, Maruti Suzuki – the leading car maker – has announced a total shift from diesel engined cars from April 2020. Maruti will shift to petrol engines across its car range, and will also go for mild hybrids, full hybrids and electric options in the coming years. Toyota will do something similar on its smaller cars and so will VW-Skoda and Renault – companies that have also announced that they won’t sell diesel engined cars from April 2020. Other car makers such as Hyundai, Tata Motors, Mahindra, Ford, Jeep and Honda will continue offering both petrol and diesel engines for the next 3-5 years at least. Don’t write your obituaries for diesel just as yet.