Friday, May 18, 2018

Diesel Crisis Continues

I essayed the piece yesterday over the EU going to court against Germany over the diesel particulate episode. 

One of the chief questions that the EU is asking.....why the Merkel cabinet isn't progressing in 'dramatic' results?

There are three major issues to this story, which the news journalists rarely touch upon or lay out for the general public.

First, with roughly fourteen million diesel cars on the road in Germany....this idea of the retrofit 'box' being developed, tested, approved and installed....has a fairly long path.  No one in the government wants to really sign off the idea unless massive testing occurs, and it's proven to be a 'winner' (meaning it does what it's advertised to do).  Then you get to the installation phase....which being realistic about this.....might take up to six months...maybe even twelve months.  Then the topic of who pays....will come up.  I did some basic calculations.  If you take the estimated cost of this 'instrument', the paperwork involved, and the labor, then you can figure that it'll cost a minimum of 24-billion Euro.  Consumers and owners paying?  The government paying, via increased diesel taxes? 

Second, if you finish all of this, and the air quality doesn't improve.....then you go and have the realization that it was trucks and buses that triggered the bulk of the air quality problem.  Then what? 

Third, a lot of this talk leads back to VW, and the odds that the EU will launch a case against them in court.....something that the Germans really don't want because of the disaster that could come. 

Merkel and team (to include the SPD)....really need this issue to go away.  But there is zero chance this topic will be resolved in 2018, or 2019. 

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