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A blog by Leon Oudejans

Automotive – part 4 – a pivotal point for electric cars

This 300th blog is about Automotive which makes sense as Automotive has significantly marked my career and this 300th blog marks my new career in writing. My previous blogs on the (VW) emission scandal were published in September: part 1, part 2 and part 3. Part 2 of 22 September wondered which department could have authorised this software manipulation. I wrote: “The only department I can come up with is the manufacturing / technology department in order to meet emission demands.”

The NY Times of 4 October 2015 just confirmed my suspicion: “Volkswagen began installing software devised to cheat on emissions tests in 2008 after realizing that a new diesel engine, developed at great expense, could not meet pollution standards in the United States and other countries, people with knowledge of the automaker’s internal inquiry said on Sunday. Rather than stop production of the engine and throw out years of work and investment, managers decided to cheat, the people said, confirming a report in Bild am Sonntag, a German newspaper.”

Part 3 of 28 September 2015 had already confirmed another suspicion: “Other reports suggested that VW was informed that the software was illegal as early as 2007. The Bild am Sonntag newspaper said that Bosch, the car component specialist which developed the software, had written to VW in that year warning that it should be used for test purposes only. Bild said that, like the reported technician’s warning, the Bosch letter had turned up in an internal VW company report that the board examined last week. It said Bosch had told VW that its plans for the software were “illegal”.”

When you combine both facts – inadequate technology and external 3rd party appliances to mask that shortcoming – then an explosive situation arises: almost 10 years ago the technology was insufficient to meet automotive regulations and little has changed since. On 2 October 2015, the Guardian wrote: “At present, nine out of 10 diesel cars on Europe’s roads are breaking the EU’s pollution limits, with the average vehicle emitting seven times more NOx than European law permits.”
The EU commission was already aiming to have real world driving emissions (RDE) monitoring measures in place by next year, which could then be applied to all new vehicles by autumn 2018. However, EU industry commissioner Bieńkowska now states: “We will have to assess whether there is a need for further strengthening these draft (RDE) proposals in the light of the investigation into the VW case.” (Guardian)
But in a sharply worded letter to EU ministers, who met in Luxembourg on Thursday, seen by the Guardian, the head of the European Automobile Manufacturers’ Association (Acea), Carlos Ghosn, said the timetable was unrealistic. Short-term improvements were possible for the approval of new car designs by September 2017, he said, “but not before September 2019 for all new registrations”.

Several media have already claimed that the future of diesel (cars) is at stake (e.g., Economist). I think and feel that the future of ALL fossil fuel powered cars is at stake and that soon only electric cars will be able to meet the international emission regulations. I’m afraid that the classic (fossil fuel powered) Automotive industry is fighting an uphill battle with politicians. Politicians will use climate change arguments to force the Automotive industry to reinvent itself. 

The absence of a fossil fuel powered manufacturing legacy, is likely to let Apple, Google and especially Tesla dominate the market. The other legacy players may face massive impairment charges that may wipe out their (financial) room for manoeuvre into the electric future of Automotive.

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