Diesel cars to die out in Tesla-like future, EU regulator says

Consumers may do as much as regulators to propel the car sector into the electricity-powered age foreseen by Tesla Inc., according to the European Union’s industrial-policy chief.

European Commissioner Elzbieta Bienkowska said the EU has had a “breakthrough moment” since Germany-based Volkswagen AG admitted in 2015 that it fitted diesel engines with software to cheat U.S. checks on smog-causing discharges of nitrogen oxides. This deeply affected “the emotions in society toward emissions and cleaner cars,” she said.

“Diesel cars are finished,” Bienkowska said in a May 24 interview in her ninth floor Brussels office. “I think in several years they will completely disappear. This is the technology of the past.”

The auto-emissions scandal may help the EU gear up for a technological revolution in road transport. Europe is seeking to retain leadership in the worldwide market for passenger cars in the face of competition from the U.S., where Tesla is based, and China, which accounts for about half of electric-vehicle sales.

VW’s cheating, which the U.S. uncovered and led Germany to order an EU- wide recall of 8.5 million Volkswagen vehicles, pushed the world’s No. 1 carmaker into a crisis and left policy makers in Europe scrambling to patch up regulatory holes that threatened a “clean-diesel” strategy dating to the 1990s.

The issue has been politically thorny in Europe because around half the cars in the region are powered by diesel – which causes more urban pollution than gasoline while having less global-warming impact – and because many member states have struggled to meet clean-air goals meant to reduce human sicknesses and premature deaths. “People have realized that we will never have completely clean – without NOx – diesel cars,” said Bienkowska, who comes from Poland.

Last week, EU governments backed a revamp of the rules for authorizing car models in the 28-nation bloc. The European Commission, the EU’s regulatory arm, won the power to fine automakers up to 30,000 euros ($35,157) per faulty car and order recalls as part of the more centralized market oversight, becoming more like the U.S. Environmental Protection Agency.

Bienkowska said “arrogance” by carmakers, coupled with their traditionally close ties to national governments, meant the draft law was initially greeted as if the industry wrongdoing had been insignificant. Gradually, she said, attitudes changed.

“I am really a little bit less frustrated than I was a year ago,” said Bienkowska. “During this denial phase, it was awful.”

Adding to the optimism is an initiative by the commission and industry to spur the development in Europe of batteries for electric cars, including through financing. European companies seeking to get a foothold in the market include BMW AG, Daimler AG, BASF SE and Vattenfall AB. Bloomberg