What Drives the Demand for Diesel?

Enlarge Image Image Gallery The ECOnetic Ford Fiesta has a diesel engine and gets 65 mpg — but is only available in Europe. FORD

Why are there so many more models of clean diesel cars in Europe than we have here in the United States?

Thomas Cantrell
San Francisco, California

It’s true that diesel cars are quite popular in Europe, certainly more so than in the United States. In some European countries, diesel cars outsell gasoline cars. But a variety of recent changes may make diesel cars much more common in the United States.

The main reason for diesel’s popularity in Europe is simple economics: Fuel (gasoline and diesel) is much more expensive in Europe than it is in the United States, primarily because of higher taxes. In 2008, while we were complaining about $4/gallon gasoline, the price of both gasoline and diesel in Europe was about $8.50 per gallon. With that in mind, diesel cars are a more compelling choice for Europeans because they are about 30 percent more fuel efficient than their gasoline-powered counterparts (for perspective, that’s about the same difference as that between a regular gas car and a gasoline-electric hybrid car). Over the years, demand from European drivers for diesel cars has sparked a wide range of diesel models and sizes.

Until recently, relatively low gas prices made fuel economy at best a minor priority for most Americans. But that has changed — perhaps permanently. Not only did gas prices spike in the summer of 2008, but they have remained unstable ever since. Diesel fuel also used to be less expensive than gasoline, but that too has changed in recent years. In general, diesel is now more expensive than gas, and its price fluctuates at a different rate than that of gasoline.

Policies from the federal government also have affected the price of diesel fuel. Federal taxes on diesel fuel are higher than those for gasoline: 24.4 cents per gallon for diesel compared with 18.4 cents per gallon for gasoline (state taxes on gasoline and diesel vary). In contrast, many European countries tax diesel less than gasoline in order to promote an increase in fuel efficiency.

Another hurdle for diesel cars in America has been their reputation. Critics say diesel cars are noisy and smelly polluters that belch black smoke. While that was true of some diesel cars from decades ago, new “clean diesel” engines are smooth, quiet and powerful, with tailpipe emissions rivaling those of modern gasoline engines. Read more in Clean Diesel: A New Era of Green Cars.