Will VW Diesel Crackdown Boost Apple, Tesla Battery Cars? – U.S. News & World Report

Posted: Tuesday, September 29, 2015

Government crackdown on diesel fueled cars after deceptive practices by Volkswagen and Audi could fuel the electric car business, Tesla Motors and SolarCity founder Elon Musk predicts as Tesla prepares to unveil its Model X SUV. 

Volkswagen admitted recently that it had installed emissions test-tricking software in approximately 11 million diesel-powered vehicles worldwide to make the cars seem to conform to acceptable limits for nitrogen oxide pollutants. Audi announced on Monday that 2.1 million of its cars are among those cars the 11 million that contain the deceptive software.

The Environmental Protection Agency responded Friday by announcing stricter emissions tests of diesel and gasoline cars to ensure no other major automakers are skirting the limits on vehicle pollution. Volkswagen’s deception, Musk said during a Friday press conference in Belgium,  shows “we’ve reached the limit of what’s possible with diesel and gasoline.”

“The time I think has come to move to a new generation of technology,” Musk said.

The EPA’s decision may not affect other car companies in the near term, Matt DeLorenzo, managing editor for Kelley Blue Book automotive valuation company, says. “I believe manufacturers are making good faith efforts to comply,” he says, citing efforts by Chevrolet to improve the emissions efficiency of its Cruze models. 

Certifying diesel vehicles in the U.S. may eventually require more-expensive upgrades, however, and breakthroughs in battery technology could make electric vehicles like hybrids a more appealing investment, DeLorenzo adds.

“As a result, you are seeing traditional diesel proponents like VW, BMW and Mercedes embrace hybrids, electrics and fuel cells,” he says.These include vehicles like the Mercedes-Benz S-Class, Volkswagen’s Jetta and BMW’s ActiveHybrid 5. 

Several countries have opened investigations into Volkswagen, and some are reconsidering their interest in diesel cars. The Netherlands has halted the sale of diesel cars there, Switzerland has suspended sales of Volkswagen diesel cars and French authorities are considering whether limiting the use of diesel cars would curb pollution, according to the AP.

Musk signaled on Twitter that the new Model X, which expected to debut Tuesday night, will have a similar price and battery powered driving range as its current flagship sedan, the Model S. That would place the likely cost of the Model X between $70,000 and $105,000, with a battery that can drive up to 270 miles without a recharge.

Apple is also reportedly working on an electric car. The tech giant has recently recruited auto engineers and could be aiming for 2019 to unveil an electric car, code-named “Project Titan,” The Wall Street Journal reports.

Musk hopes that Tesla could improve its vehicle batteries enough for them to drive 600 miles by 2017, according to an interview with Danish media. Tesla cars will also soon have limited self-driving capabilities on highways, Musk added, explaining that while regulators may not allow fully automated cars on roads before 2020 he predicts “it will be technologically possible in three years.”

The declining price of oil this past year, however, has slowed the urgency with which people make the switch from gas-powered to electric cars in the U.S., according to research conducted by IHS Automotive. The Tesla Model S dominates as the most popular electric vehicle in the U.S., but that nascent market accounts for only 0.8 percent of all registered automobiles in the nation, IHS reported in July.

[READ: Volkswagen Details Brands Affected by Scandal]

The Diesel Technology Forum trade group remains optimistic that demand would grow for diesel vehicles, which are currently 3 percent of the U.S. passenger vehicle market.

“Some analysts predict diesels will increase to 7 to 8 percent of the U.S. market by 2020,” the group said in a press release shortly after government scrutiny of VW began. 

While the Volkswagen scandal may damage consumer perception of Volkswagen and diesel cars, “potential diesel shoppers may simply opt for standard combustion engine versions of the vehicles they were considering” rather than switch to electric cars, says Akshay Anand, an analyst for Kelley Blue Book.

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