The Diesel Crisis Update

Focus did a great piece today talking over the diesel car crisis in Germany, and this hint of cost to help fix part of the problems.

For most Americans who aren't familiar with the diesel standards and the crisis going on....a simple background.

Diesel vehicles emit a toxic emission.  Because of deception by VW and a number of other brand-name car-makers in Germany....everyone has come to realize the emission was way more than accepted by law. 

Over the years, there was an effort to clean up diesel car emissions.....the EU devised back in the 1990s....a standard.  Euro 1 standard started in 1993.  Euro 2 standard started in 1996.  Euro 3 standard started in 2000.  Euro 4 standard started in 2005.  Euro 5 standard started in 2009.  Euro 6 (the current one) started in 2014.

What the scientists say is that only Euro 6 vehicles are currently meeting the goal set.  Some Euro 5 vehicles can be 'bumped-up' slightly to near the Euro 6 requirement.  Nothing can be done with the cars that are Euro 1 to Euro 4 standard.

So we get to the topic of today....hardware upgrades for the Euro 5 diesel vehicles.  While some software upgrades can help.....most agree that a hardware fix will have to be part of the solution, and that cost money (unlike the software episode).

The car companies?  They have no desire to talk the hardware upgrades and very much opposed to them.  Chief reason?  Some people talk in the range of 10,000 Euro ($12,000 American) to take the parts and install them on a vehicle.  Remember....it can only be done with vehicles made in the era of 2009 to 2014. 

Some have added this up for particular cars....like for example the VW Passat.  They figure 10 hours of mechanical work with 7,500 Euro of hardware.  You would be looking at a container with new sensors, a new tacho, control units, cables, a particle filter, a new muffler, and a tank.

Mercedes looked at the GLK 220 model and figured up a cost of 11k to 15k Euro. 

If the companies were forced into paying for the upgrade?  You would be talking about putting some into marginal profit situations for multiple years and their stock would plunge.  It'd likely take a German judge and a law by the Bundestag to make this happen....but it's to imagine that the CDU/CSU folks would ever seek to create a 'monster-type' law with this type of effect.

In some ways, you would be better off to just bring every single owner with a standard 1 to standard 4 type diesel car into a room, and just figure the blue book value, and have the government write a check out and then force the car companies to pay half of the pay-out.  Then just accept the situation with the standard 5 cars for the next eight years....then hand them a blue-book value deal and pay them off.