Diesel vehicles were regarded as the greatest treasure by European automotive manufacturers prior to the Volkswagen emissions scandal, which has devastated the reputation of the particular vehicle type, and the increasingly rigorous targets of carbon reduction initiated by various European countries have successively stipulated the termination deadline for ICE vehicles, which forces the exit of diesel vehicles. While major manufacturers accelerate on the implementation of electric vehicles, or develop hydrogen fuel cell vehicles, diesel cars are gradually fading from the market.
The engine factory of PSA Peugeot Citroen in Tremery of Moselle was initially the largest diesel engine factory in the world, and is now forced to transform into a motor factory for electric vehicles under the market transformation. The Tremery plant merely produced 10% of electric vehicle motors over its total output in 2020, though additional production lines are expected to happen in 2021, which will achieve an annual production of 180K units, before further expansion to an annual production of 900K units in 2025 that is more than half of the total capacity for the particular plant prior to the pandemic.
The market of diesel vehicles has collapsed after the Volkswagen emissions scandal in 2015 not only because of the damaged reputation, but also the implementation of the EU regulations, which imposes penalty to manufacturers who produce vehicles that exceed the regulated air pollution, and forces manufacturers to enter the field of electric vehicles by exiting the market of diesel vehicles. The arrival of the COVID-19 pandemic that temporarily suspended the market provided a buffer period for manufacturers in transformation, where the culprit Volkswagen to Japanese giant Nissan are all abandoning diesel vehicles, and marching towards electric vehicles.
2021 will accordingly become a critical year where the automotive industry swiftly shifts towards electric vehicles, though a transformation always comes with damages, whether it is the reinvestment in production line technology from businesses, or the uncertainties created on employees.
An electric vehicle motor merely contains 1/5 of components to a diesel internal combustion engine, and requires less assembling staffs compared to diesel vehicles, which is a good news to the manufacturer, but not so much for the workers. However, Stellantis merged by PSA Peugeot Citroen and Fiat Chrysler during January 2021 claims that factories will not be shut down, and that employees will not lose their jobs.
The industry believes that European automotive manufacturers will have to lay off a substantial amount of workers in order to preserve sufficient funds that can be invested on necessary technology due to the trailing development progress in electric vehicles compared to Tesla. PFA estimates a total of 15K diesel engine-related jobs will be lost, and 400K jobs will be lost for the entire automotive industry. IAB believes that electric vehicles will threaten 100K jobs in Germany, which is 1/8 of the jobs in the German automotive industry.
Diesel vehicles occupied half of the European automotive market in 2015, which was way higher than that of North American and Asian markets, though more than 20 models will no longer be offered in diesel version during 2021, including Polo of Volkswagen, Scenic of Renault, Micra of Nissan, and Civic of Honda. HIS Markit believes that 2021 will witness a drastic abandoning of diesel vehicles in the automotive market.
Simultaneously, 2021 will also be the year where electric vehicles invade the automotive market. In terms of the UK market, a total of 29 BEVs or HEVs will launch in 2021, which is more than the 26 models of ICE vehicles, where merely 14 of them offer the diesel variation.
End consumers are also becoming more interested in electric vehicles. The overall automotive sales in the EU had plummeted by 29% within the first 9 months of 2020, though the sales of BEVs and HEVs had increased by a whopping 122%, which resulted in a higher amount of new registrations for BEVs and HEVs during September 2020 compared to that of diesel vehicles. Although the sales of BEVs and HEVs merely occupied 8% of the overall automotive market, it has foresaw the doomsday of diesel vehicles.
The Cleon plant of Renault is also adjusting its production line of diesel engines to electric vehicle motors, where the production lines of electric vehicle motor and HEV engine now occupy 2 plants, and the assembly line of diesel engines is now left with half of plant. Renault’s union has expressed its sorrow over this transformation, and commented that the employees will not recognize the work place when they return after several years.
(Cover photo source: pixabay)