Despite rising fuel prices and stricter CAFE standards, General Motors is not expecting widespread demand for diesels in the U.S. in the coming years. Several German automakers are banking on the U.S.’ acceptance of diesel-powered cars, but GM will continue to develop its diesels mainly for overseas markets.
“Frankly in the United States, with diesel fuel the same price as gasoline, I don’t think that many Americans are going to pay a $3,000 or $4,000 premium for a modern diesel engine,” GM chairman Bob Lutz told The Car Connection.
The $3,000 to $4,000 premium on diesels over gasoline engines is due to the increased amount of emissions equipment needed to make a diesel-powered car 50-state legal.
Lutz explained that diesel are so popular in European countries, such as Germany, because of the way fuel is taxed. “Gasoline is $8 per gallon, diesel fuel is $4 per gallon, with that kind of price disparity everyone is going to buy a diesel,” he said.
Because there is a lack of motivation for U.S. consumers to make the switch to diesel, Lutz predicts that the U.S. market for diesels will resemble that of Switzerland, where the taxing structure is similar to ours. Diesel-powered cars make up about 8% to 10% of the market there.
Instead, Lutz says that ethanol-powered FlexFuel vehicles are a much better solution than clean diesels. “Nothing we can do in the next five or 10 years gets even close to that kind of impact,” he said. GM currently has over 1 million FlexFuel vehicles on the road and announced a new partnership with Coskata — a maker of ethanol fuel — at this year’s Detroit Auto Show. Look for GM to also use smaller turbocharged engines in the future.



01/28, 11:19 AM
posted by:
snork
Yippee for FlexFuel:-/ Atleast you can buy diesel most anywhere, I don’t even know where I can get FlexFuel…thus FlexFuel isn’t even a viable option IMHO.
01/28, 11:26 AM
posted by:
HoosierHero
Good call GM. Gasoline isn’t the answer whether it’s diesels, ethanol, or whatever. Focus on the future like hydrogen, solar (I know, tee hee!), electric, etc.
01/28, 11:33 AM
posted by:
cookie4me
I wonder what the cost difference is in Honda’s new diesel engine that doesn’t need Uretha to meet emissions? Anyone have details on this engine?
01/28, 11:39 AM
posted by:
DrFill
Diesel is like hybrid in that if you can get your economies of scale up, you can lower the cost you pass onto the customer. In order to do that, you need to show a significant improvement gas economy, and you need to start with volume vehicles at the heart of the market, like Honda will.
In other words, Diesel will work here, just like Hybrid worked for Toyota. You just may have to lose money for the first 5 years before you get a return.
But the payoff is HUGE, if you do it right.
GM is betting against itself
I’ll bet on Honda.
DrFill
01/28, 11:40 AM
posted by:
F451
GM is focusing on Lutz. Lutz, Lutz, Lutz. The company is a one-man show! Ethanol sucks, and will continue to suck. Ethanol is simply a “borrow from Peter to pay Paul” scenario.
.
Lutz should get the clue: No Country for Old Men…Friendo.
01/28, 11:40 AM
posted by:
d00d
Apparently Lutz is a moron.
The price per gallon may be about the same, but the mileage per gallon is greater.
I thought this was obvious.
01/28, 11:49 AM
posted by:
Bimmer
GM needs to take it’s haead out of the ass. In US there maybe 20-25 stations that sell E-85 and only in Mid-Western states. In Canada there’re 2 (TWO!) and last time some auto-writers tried to use ‘em they didn’t have any fuel! So, first make infrastructure then produce flex-fuel vehicles!
At least Diesel fuel is readily available.
Go, Diesel!
01/28, 11:53 AM
posted by:
corvette
just continue to focus on cars like the Volt GM.
01/28, 11:58 AM
posted by:
golf4me
Wow, Lutz is really slipping now. How old is he? Like 85? I’d start questioning his judgement if I were Ricky. $3000-4000 premium for diesel? Hmmm, I don’t think VW charges that. Nor do I think Honda will either. Ethanol is NOT the answer, as it’s not available and since everyone has figured out that it takes more energy to produce than it gives, producers are even now shying away from it.
GM is going to hurt and hurt bad if they don’t match their competitors’ powertrain choices, even if just from a marketing standpoint. I, for one, will gladly pay $2000 more for a diesel if someone will make one for a vehicle I actually like. There are other advantages to most diesels than just efficiency, long life being one of them, and for someone like me who can drive 50k miles per year, that’s pretty important, and the $2k is recouped pretty quickly too.
01/28, 12:19 PM
posted by:
Madcapp
I had a friend that had an Oldsmobile 98, and it would diesel for about 5 minutes after you shut it off.
01/28, 12:33 PM
posted by:
441Zuke
good diesel is 3.29 gas is 2.74
01/28, 12:38 PM
posted by:
SwerveEarly
Price varies, the last Diesel Jetta was $1200.00 more then gas. Which at current prices and 15K miles a year it would take approx. 3 years to recoup costs through better fuel mileage.
Jeep Cherokee its like $3000 more.
Full-size trucks like Chevy, Ford and Dodge diesel adds $5K-$6K more so it takes longer to recover costs.
But diesel engines should also last 50% longer and reasale is higher so some costs can be recovered there.
The wild card in the game at this point is cost, reliability and long term maintance/effectiveness of newly invented emmisions control equipment.
01/28, 1:03 PM
posted by:
moto-racer13
Well this is so typical of American business. Only concerned about instant profits, never a long term outlook. This is why every other country is enjoying economic growth. Diesels are great and if you have never rode in the Mercedes Bluetech diesel, you should. That thing is so smooth and quiet, great on fuel, and amazingly fast. But because of GM’s lack of progressive spirit, the Germans will continue to enjoy a growing market for diesels here in the US.
01/28, 1:28 PM
posted by:
SwerveEarly
moto; What planet are you on. Every major market on the planet dropped 5%-10% last week just on fears of the US economy slowing.
Tax differtiation in Euro countries between gas and diesel is why people buy diesels there. No other reason. So just ask you federal govt to tax regular gas until its double the cost of diesel fuel. Then U.S. can be just as awesome as “every other country” that you spoke of that are experienceing great economic growth this year.
U.S. economy is still envy of world, do you really think that GMs problems are repeated in every company in U.S. Every auto corp. on the planet has to answer to shareholders. Its the way it is.
01/28, 2:01 PM
posted by:
Bimmer
golf4me,
not only E-85 is not available and it’s requires more energy to make, it’s also costs at the pump almost the same as gas, but it gives les MPG then gas. So, unless you have an investment in the stocks of Ethanol producers or you’re a producer, why would you pay more (as a consumer) to get less?
01/28, 2:12 PM
posted by:
Jazz
So American consumers are going to pay more for food so that they can drive more?
01/28, 2:25 PM
posted by:
Get Real
The EPA is run by Morons, brain damaged people that also run GM.
The EPA should STOP trying to make tailpipes cleaner than pre-historic air (which by the way was full of volanic debris).
GM should try the market, they go ahead and dump the H3 and Escalade on the market and wait for people to buy them…why not a diesel car ????
01/28, 2:31 PM
posted by:
sj79
I’m sure there are intelligent Lutz bashers out there but you wont find any on this site. Just a few facts before more stupidity is posted here.
1. We dont know how much of a premium HOnda will charge for its diesel but all existing diesels in US models have substantial premiums
2. Lutz said E85 was the FASTEST way to reduce oil consumption and it requires the least change in consumer behavior. He is right and he never said that GM is ONLY betting on E85.
3. he is also right that the premiums for diesels dont make a lot of sense when diesel fuel is just as expensive as gas here. It will take years to recoup your investments.
4. Hybrids are far more popular than they used to be but they are still 1 or 2% of total sales. they are only 10% of Toyota’s US sales so lets not act like “everyone” is rushing to buy hybrids. There is no evidence that most buyers are willing to shell out $4k more to get a hybrid even if that model gets substantially better mileage than its gas only counterpart.
5. Not only is diesel cheaper in Europe, they give out TAX CREDITS to help offset the higher purchase price. Our new CAFE rules have no such provisions and thus diesels wont be as attractive.
6. US emissions rules makes it expensive to get 50 state compliant diesels in this country which makes diesels even LESS attractive.
7. GM has a new diesel V8 in the works that will be in trucks next year.
01/28, 2:47 PM
posted by:
The Stig
Lutz has said this before – he’s saying nothing new. Ford has taken a similar position and I’ll ignore GM and Ford as long as they ignore the domestic diesel market.
01/28, 2:56 PM
posted by:
sj79
F451,
You can make all the silly comments you want and insult me, Lutz, the Pope or anyone else but the facts I reported cant be disputed as evidenced by your ridiculous retort that failed to address anything I wrote. I mean, how stupid can one be to say GM is “ignoring” diesels when they already sell diesel trucks and have a brand new 4.5L V8 coming next year? Did you read anything I wrote? Why do you think there is no flood of diesels coming for cars in the US? I will tell you why: they know its not practical for lower end cars due to cost of technology and cost of diesel fuel. In case you didnt notice, Toyota, Nissan, Hyundai, Ford, etc. have said little about bringing diesels for cars to the US in large numbers.
BTW, you should note the US gov included a huge ethanol production provision in the CAFE bill so apparently they think its something worth expanding. Get mad at them, not me.
01/28, 3:29 PM
posted by:
DeansterTJ
Lutz is right. I mean, who would know best about diesels? Stupid loser car companies like BMW and Mercedes, or real technowizards like GM?
01/28, 3:29 PM
posted by:
affliction
I think GM is making a grave mistake by ignoring diesel. I feel the right move would be to (at the very least) outsource the engines and at the same time develop the flex fuel technology and perhaps one day license the technology to other automakers. But in order to be successful in the flexfuel market, they have to actually build the stations themselves OR upgrade existing fuel stations alll around North America and that will be VERY expensive. But if you want the customer, you have to create the demand and in this case I only see one way to create the demand and that’s by GM taking the initiative in upgrading fuel stations ALL ACROSS THE US (at the very least). So if this sounds far fetched then GM should develop its own diesels and focus on other practical ideas.
01/28, 3:44 PM
posted by:
sj79
“Lutz is right. I mean, who would know best about diesels? Stupid loser car companies like BMW and Mercedes, or real technowizards like GM?”
more stupid commentary. GM makes a lot of diesels in Europe where THEY ARE PRACTICAL. Currently BMW sells ZERO disels in the US while GM has the duramax in its pikcups and another one on the way. BMW has announced plans for TWO products that will have diesels in the US and both will have substantial premiums over the gas engines. In a luxury car this is easier to pass off but in a sub $25k mainstream car that diesel premium isnt going to be popular. But, feel free to blame Lutz while ignoring reality. Where are the diesels from Toyota, Nissan and Hyundai? why are they not flooding the market with diesels? Use common sense before launching into the same old “Lutz is the devil” responses people.
If any of you would read all of his comments instead of basing your posts on that little excerpt you will see he never said GM would be IGNORING DIESELS! All he said was he doesnt see diesels having substantial marketshare in the US in the near future. THAT IS ALL HE SAID and there is no reason to doubt this. Do you people really think we are going to go from 0% to 20% diesel in 5 years? 10 years? Currently CA is suing the feds to enact tougher air quality standards that will make it even tougher for diesels to be 50 state legal in the US. Although Honda has supposedly found a way to meet standards without urea treatment you can rest assured their solution will cost money. When you use the urea you have to get the tank changed out every few years to keep the system running properly and the BMW and MB models have this issue.
01/28, 4:09 PM
posted by:
Bimmer
sj79,
E-85 also costs as much as gasoline. But Diesel gives you 30% more MPG then gasoline, where E-85 gives you aboiut 20% less => Diesel gives you ~ 50% MPG then E85.
01/28, 5:15 PM
posted by:
Z06ified
As much as I hate to say it, as I’m a fan of diesel and I own a diesel vehicle in the U.S. now, I think Lutz is right – I just don’t see Americans accepting diesel anytime soon. Just about everyone I know thinks I’m crazy for driving a diesel powered vehicle, and they cringe when I mention a new diesel model coming out that is available in the U.S. There’s just such a huge negative perception and bias against diesels in the U.S., with the exception of the heavy duty pickup truck market.
Maybe it will catch on after people ride in a modern diesel powered car coming to the U.S., and word of mouth changes their perception. But that will likely take a decade or more. Word of mouth perceptions are slow to change.
It is interesting that virtually every foreign automaker has announced they will offer diesel powered cars in the U.S. within the next 3 years. Honda, Nissan, Toyota, BMW, Mercedes, Audi, VW, just to name a few. Are they all wrong about the U.S. market? With all of these companies posting large sales increases in the U.S. market over the last 20 years, I don’t think they’re wrong. I don’t think you should always follow the herd, but GM’s diesel attitude could leave GM vulnerable and without good product once again.
01/28, 5:28 PM
posted by:
Bimmer
C6R,
get your facts checked before posting. Last week on Autoline Detroit (it airs on PBS Detroit or http://www.autolinedetroite.tv) host had interview with top economists from Ford and GM. According to them, average age of cars on US roads is 9 years old, not FOUR! So, I don’t know where do you live that only one in ten cars are over 5-6 y.o. But across the US it’s 9 y.o. My other point: yes, Diesel costs more then gas at the pumps, but not 30% more. So, even with little premium cost over gas, it’s still more viable to buy Diesel, especially if you do lots of miles.
01/28, 5:37 PM
posted by:
Bimmer
Z06,
thank’s for intellegent comment and support for Diesels. I think reason why so many American’s dislike Diesels is based on preseptions of old Diesel technology and fiasco GM had with using Diesel engins in cars (Oldsmobile with many engine problems) and even Fords old Lincoln Mark VII (that used old 2.4 inline six Diesel from BMW) of them only lasting 1 year and having maybee 400 cars. Hopefully tht’s gonna change in the next few years as more cars will become available with Diesel engines.
01/28, 5:39 PM
posted by:
DrFill
My last comment on this.
There was a time when people said no one will buy a Japanese pick-up truck.
No one will buy a hybrid.
No one will buy a Lexus over a Mercedes.
No one will buy a minivan.
No one will buy a crossover.
If you do it right, price it right, market it right, you can sell anything.
You just have to know how.
GM is saying we don’t know how to make it work.
We’ll see if it can’t be done, or if GM is in the right position to miss the boat.
Again.
DrFill
01/28, 6:00 PM
posted by:
cookie4me
dang, still no word on the Honda diesel. Just a lot of comments on how luny an old man might be.
01/28, 6:02 PM
posted by:
Htay9500
and E85 is the answer? please, theres barely any benefits to E85.
01/28, 7:42 PM
posted by:
DrFill
Did you or Lutz blow a fuse?
DrFill
01/28, 9:30 PM
posted by:
autonut
I don’t know where Lutz is getting his prices from, but last summer diesel in Germany was about 6-6.5 USD/gallong and gasoline from 7 to 8 (depending on the grade). Actually there are at least 2 grades of diesel fuel in Germany as well. I hardly saw mid-size to large size cars in Europe wit gasoline engines. Everything utilizes diesel (except rental fleets). 70% BMW are diesels (and I have not seen another 30% at all). Ditto Benz & Audi.
01/28, 10:03 PM
posted by:
Get Real
In Georgia we are begin forced into E15, 85% Gasoline.
My mileage has gotten very bad and it costs the same…..so my net loss.
Thank-you to the US of A government.
01/29, 12:57 AM
posted by:
C6Racer
Thanks for the link, Bimmer. I just posted based on my observations. I live in California where I see no less than two or three cars in every driveway, so that’s probably why.
Don’t get me wrong, I love diesel engines but, I’m the kind of person who would ONLY buy a diesel-powered vehicle if I need big-time power to haul heavy loads NOT fuel economy, although that’s a nice bonus. Can’t go wrong with 660 lb-ft of torque.
01/29, 7:42 AM
posted by:
vincenzo
Came here to write what Z06ified wrote.
01/29, 9:28 AM
posted by:
Z06ified
autonut –
Diesel prices in the U.S. are almost the opposite of Europe – diesel is sometimes higher than gasoline, especially during the winter months when heating oil demand is up in the colder regions, particularly the northeast, of which 60% of homes are heated with heating oil, which is almost the same as diesel. Right now, I pay $3.59 a gallon for diesel, while premium 93 octane gasoline is $3.49 a gallon, and regular 87 octane gasoline is $3.19-$3.29 a gallon. So I’m paying $0.30 a gallon premium for diesel right now. Sometimes its even higher, but during the summer, it usually becomes slightly cheaper or the same price as regular gasoline. The U.S. doesn’t have different tax structures for diesel versus gas – most states tax the two fuels the same.
01/29, 9:49 AM
posted by:
sj79
“sj79,
E-85 also costs as much as gasoline. But Diesel gives you 30% more MPG then gasoline, where E-85 gives you aboiut 20% less => Diesel gives you ~ 50% MPG then E85.”
never said anything about E85, it has its issues as well.
I just want to know where all these diesels are that have been announced. Several people here have said “everyone” but GM has committed to diesels in the US car market. Other than Honda I heave heard NOTHING about near term non luxury diesel powered cars. Toyota JUST announced it will have a diesel for their trucks/SUVs here in a few years. Again, GM already has a diesel for truck duty. In addition, GM is working on a new 2.9L turbo diesel for the CTS and they have not said the engine wont come to america. Some have said the CTS, next Aura and BRX will have the engine.
While diesel cars are more efficient it has to be remembered that the up front cost is higher and diesel sint cheaper. These are problems the government can address but has chosen not to address. These are not Lutz problems or GM problems, they are national problems that need to be worked on if diesel is to catch on.
BTW, when have Ford, Chrysler or Hyundai said ANYTHING about offering diesel cars in the US?
01/29, 12:02 PM
posted by:
1c3d0g
Damn it. I’m still waiting for a Diesel SUV coming out of GM. As long as that ain’t gonna happen I have to look elsewhere (another Domestic, but still, I prefer a GM vehicle).
01/29, 1:11 PM
posted by:
cookie4me
murderredout, if you are looking for the democrats to lead the USA to some 90’s high rolling economy, i’m afraid you’ll be much disappointed. The American economy has been shrinking since the late 90’s in terms of gold. All the expansion has been due to credit and the government’s answer is to give more credit! Ridiculous! Just prepare to bend over because whatever you have left after your market losses, the government will be there to extract the rest!
01/29, 2:21 PM
posted by:
DrFill
Oh it’ll take 10 years, minimum, to clean up George’s messes.
Hopefully, Heckyl and Jeckyl will sit this one out.
DrFill
01/29, 5:17 PM
posted by:
davidh
One the one hand as a Diesel driving European, I’m pleased that GM & Ford in the States are not going down the Diesel route as this is likely to increase the Diesel fuel costs in Europe due to Refining capacity issues. On the other hand I’m saddened by the fact that these decisions are going to be another blow to the once proud American car industry, especially as Bob Lutz is also misleading the American Market.
I checked the fuel prices in Europe and yes whilst the Gas and Diesel prices are much higher here, the price of diesel varies from 9% more than gas to 20% less than gas ( survey of 20 countries in Europe including Germany where diesel is cheaper than gas!). The diesel engine does cost more than the gas, but trying to get an average 35mpg from a gas engine will be even more expensive. Diesels already achieve 35mpg.
I used to be a “petrol head”, but I’m now on my 8th diesel car and would never go back to a gas one even if diesel and gas were the same price (due to performance benefits).
In Europe, the used car values of diesels are 20%+ higher than the gas equivalents. Reading articles in US magazines there is an even greater price differential with say the VW diesels.
Unfortunately, it’s not going to be until the European & Japanese import Diesels, that the US OEM will realised they have put themselves at a big disadvantage.
01/29, 9:19 PM
posted by:
C6Racer
1c3d0g, I don’t know what size SUV you want but I do know that GM is putting the new 4.5L Duramax V8 in the Yukon and Tahoe sometime soon. 310hp and 520 ft-lb of torque!
01/30, 6:32 AM
posted by:
1c3d0g
C6Racer: indeed, but they better start offering them soon, or they’re going to lose lots of customers. If they’d have even one mid-size Diesel SUV they’d sell them by the truckloads.
01/30, 8:09 AM
posted by:
DrFill
It would be best if GM keeps diesel targets to themselves. Showing your cards when there are cards still being dealt is not good strategy.
DrFill
02/01, 3:22 PM
posted by:
jackjimturkey
dumb
02/07, 10:23 AM
posted by:
rodeo40
Lutz is consistently off the mark…in 5 years they will be scrambling to bring diesels to the US…and once again…it will be too little too late.