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JD Power Survey Puts Clean Diesel Over Hybrids

January 29, 2003

Given a choice, more consumers indicate they would select a clean diesel engine over a hybrid electric engine to power their next vehicle, according to the JD Power and Associates Clean Diesel Market Assessment Study.According to the study, if given a choice between a traditional petrol, clean diesel or hybrid electric engine in their next vehicle, 27 percent of consumers said they would select a clean diesel, compared with 22 percent who would choose a hybrid electric engine and 51 percent who would select a gasoline-powered engine.Given a scenario where fuel prices rise above $2.50 per gallon, 56 percent of consumers said they would select a clean diesel-powered vehicle, compared with 38 percent who would purchase a hybrid electric vehicle."This indicates that clean diesel technology has great potential," said JD Power and Associates executive director of global forecasting Walter McManus. "The two major challenges automakers face with clean diesel technology is creating awareness and overcoming the negative perceptions many consumers have of diesel. They need to educate consumers on clean diesel technology and show them that it provides cleaner emissions, better fuel economy, and more power, durability and dependability than many of the diesels on the road today."Clean diesel technology was defined for survey respondents as "comparable performance of that of a petrol engine, but the typical diesel noise, vibration and pollution have been reduced to that of a petrol engine."Based on that description, 22 percent of consumers say they "definitely will" consider a clean diesel engine in their next vehicle purchase and an additional 44 percent indicate they "probably will" consider a clean diesel engine.Consumers also express some concerns about clean diesel, including limited availability of fuel and service and repair locations, along with maintenance costs and whether clean diesel engines will be available in the vehicles they desire.Vehicle manufacturers expect the first clean diesel-powered vehicles to be introduced in 2006, the same year the United States Environmental Protection Agency has mandated low-sulphur diesel fuel to be available nationally."Widespread consumer acceptance of clean diesel-powered vehicles will depend primarily on the fuel's availability in the marketplace," McManus said. "If low-sulphur diesel is available at only the stations that offer standard diesel today, then widespread consumer acceptance is unlikely. Before consumers spend their money for a clean diesel-powered vehicle, they want to know more about the technology and have some reassurance that there will be convenient refuelling locations."Dealers, suppliers and engine manufacturers expect the price premium for a clean diesel engine to be between $1,000 and $4,000 above a standard gasoline engine. American vehicle manufacturers expect the price premium to be between $2,000 and $4,000, Japanese vehicle manufacturers expect it to be between $1,000 and $2,000 and European vehicle manufacturers expect it to be $600 or less. However, US consumers expect to pay between $400 and $1,000.The study finds that consumers want the government to offer some type of tax credit to offset the price premium for these vehicles, with an average tax credit of $1,677 needed as an incentive to purchase a clean diesel vehicle.Consumers expect to recover some of the price premium in fuel savings. Even if the fuel cost saving from clean diesel doesn't cover all of the incremental investment in buying the vehicle, 40 percent of consumers indicate that they still will consider a clean diesel vehicle for the lower fuel costs, tax credits or to reduce dependence on foreign oil.
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