Which drivers does diesel still make sense for and is it more sensible to buy or lease?

After glancing at headlines like Autocar’s “Honda to ditch diesel in Europe by 2021”, the Guardian’s “Ban petrol and diesel cars from Scottish cities, says coalition” and “Diesel cars emit more air pollution on hot days, study says” or the Express’ “Electric cars price parity to petrol and diesel is near”, it would be understandable to perceive that diesel cars are to be avoided, full stop, end of.

We don’t think that’s strictly true as a blanket rule, though, and nor do various automotive and other voices out there, so we weigh up the evidence and arguments for and against diesel fuel and neutrally look at whether leasing or buying a black nozzle-drinking vehicle for cash or on finance makes the most sense, all things considered.

Diesel registrations resurgent in certain European countries

Innovation Origins, a Netherlands-based platform for independent journalism, fascinatingly asked “Is diesel cleaner than electric?” in a recently-published piece, which reveals early on that diesel car sales (and by extension leases) have perhaps surprisingly since the start of 2019 started rising again in Germany, where the so-called diesel emissions scandal or ‘Dieselgate’ first began - and diesel registrations are also picking up in Holland.

Electric and plug-in hybrid cars’ running costs and total cost of ownership (TCO) are admittedly reducing all the time, but manufacturers are shrewd enough to realise that there won’t be a sudden en masse switch to electrified models and the OEMs that have made less inroads in the field have been working hard to improve their diesel engines in minute detail. Although EVs tend to dominate media commentary, magazine reviews and the like, diesel and indeed petrol will continue to exist for at least several years yet and it would be wholly wrong for car manufacturers to drop support for and development of such engines in the way that major software companies often do.

Are EVs still greener than ICE even after including factory and battery production?

Imperial College London certainly states that they are, after conducting a detailed report alongside Drax Electric Insights which concludes that electric cars still emit half the CO2 emissions of similarly-sized petrol and diesel models over their lifecycle, including the carbon used to produce them and their expensive batteries in factories, which is an angle some have used to criticise EVs’ benefits.

The pair calculated that the CO2 used in the production of some typical electric cars can be offset after three years of zero-emissions motoring, but it’s perhaps important to note that this depends on the model, with long-range models like the Audi e-tron, Jaguar I-Pace, Mercedes EQC and Tesla’s Model 3, S and X unsurprisingly requiring as much as around 93,000 miles of use before offsetting their production CO2 burdens, which can equate to three around-the-world flights. It’s hard to know what to believe frankly, as a similar study from the University of Liege in Belgium identified that a 60kWh electric car would need to be driven 435,000 miles before it becomes greener than a typical petrol car unless the grid it’s fed electricity from happens to be fully-renewable.

As the actual grid electricity used to power electric and plug-in hybrid cars also continues to increasingly comprise a low-carbon mix, the overall cost and environmental advantages of driving EVs will keep becoming more and more compelling, but it will still realistically take half a dozen years before they overtake petrol equivalents, with pure EVs currently making up less than 1% of UK car registrations.

EVs will always boast more compact CO2 footprints than internal combustion petrol and diesel cars because battery-electric drivetrains operate around 300% more efficiently and, according to Autocar, even up to 200% more greenly than a self-charging hybrid like the Toyota Prius.

Countries such as France, Norway and Sweden generate a greater percentage of their electricity using hydro (water) and nuclear power, and it’s reassuring that Audi’s e-tron factory near Brussels gets 95% of its electricity from solar panels, whilst using biogas to heat the facility, so we certainly add to the many voices hoping that the UK will make gains soon, not held back by Brexit and other factors. 

Should all types of drivers switch to electric cars as soon as possible?

The senior VP of Volkswagen Group stated to the media earlier this year that “the tipping point is near…and will be price equity”, with EVs immediately becoming a better choice once they cost the same as petrol and diesel models and once prospective switchers have overcome related fears such as ‘range anxiety’ and charge point requirements and etiquette.

“Owning a full-electric vehicle costs about half of what a gas car costs to operate”, Fischer commented, and in terms of servicing, maintenance and the cost of electricity as a fuel, we would certainly agree, because EVs comprise few moving parts and make do without many of the mechanical components commonly associated with cars and other conventionally-fuelled vehicles. Personal lease prices for the new Vauxhall Corsa E electric hatchback currently start around the ￡270 per month mark inclusive of VAT, whereas a petrol Corsa can be found for under ￡150, and their retail prices commence at ￡29,990 and ￡15,550 respectively, so EV and ICE price parity still clearly has some way to go.

We are also very encouraged by findings presented by Jaguar after crunching data from its Go I-PACE smartphone app, which reveal that 87% of the UK’s drivers of the marque’s all-electric SUV need just two full charges to facilitate their typical weekly mileage of 216 miles, which is interestingly one hundred miles higher than the average UK motorists’ weekly distance, while just over half of these Jaguar I-PACE drivers only needed one weekly charge to see them through. EVs are unarguably becoming more and more convenient with each LCI, the latest Nissan LEAF and Renault ZOE each providing a battery range of 170+ miles.

There is still a case for diesel

While diesel sales in the UK fell by close to a quarter in 2018, and various motorist-charging schemes like London’s Ultra Low Emission Zone (ULEZ) have kicked in, with clean air zones (CAZ) on the horizon, fuel from the black nozzle is still typically recommended as best for high-mileage drivers who regularly cover long distances, many of which will likely be outside cities, towns and other urban areas. Anyone driving more than 200 miles per day who couldn’t afford the time investment of having to wait for an electric car’s battery to recharge from flat is, for now, still certain to find diesel the most suitable fuel.

Personal and business drivers who own or lease large SUVs, rugged 4x4s and vehicles like double-cab pickup trucks or even estate cars for towing caravans, horse-boxes, boats, large trailers and so on are also usually better off choosing diesel vehicles because of their torquey power and relative efficiency. Yes, electric motors endow EVs with instantaneous acceleration but they’re generally not yet recommended for towing, as the possibility of burnout still exists and huge strain would be placed on the drivetrain, whereas torquey diesel engines are often designed with towing in mind.

Nearly all the latest cars offering one or more diesel powerplants in their lineup will be Euro 6 compliant and therefore exempt from clean air zone fees, and a growing number of diesel cars such as the Jaguar XF, new Range Rover Evoque and new Mercedes A-Class impressively comply with Real Driving Emissions Step 2 or RDE2 standards and meet Euro 6d cleanliness, so escape the government’s current 4% benefit in kind (BIK) tax surcharge for company car drivers of diesel cars.

The SMMT is reported as having calculated that the average UK household could save around ￡132 per year running a diesel car rather than a petrol model, with the saving rising to as much as ￡400 for larger saloons, four-door coupes, MPVs, executive and prestige cars plus four-wheel drive SUVs.

Why leasing rather than buying a diesel makes sense

Depreciation will admittedly hit many diesel cars harder than petrol equivalents, as motorists and indeed societies distance themselves increasingly quickly from fuels perceived as dirty, and this is where one of the primary benefits of car leasing comes into play, namely that because ownership isn’t involved, a diesel car depreciating is something the leasing company has to worry about, not the customer.

Monthly contract hire rentals do admittedly increase the higher a customer’s required annual mileage is, though, so this is worth bearing in mind. Road tax has recently increased for diesel cars, but VED is included in leasing prices, taking this headache away on the other hand. On a general note, while diesel costs more at the pump, diesel cars on average run 15-20% more efficiently meaning they require less regular forecourt stops. Modern diesels have become much quieter, as refined as petrol counterparts in some instances, and their torquier characteristics make them less easy to stall and sometimes keener to accelerate.

Hot performance diesels

Enthusiastic interest in diesel cars still exists, Autocar magazine this month publishing on their website “Hot diesel saloon showdown: Audi vs Alpina vs Mercedes” in which they pitch an Alpina D5 S, the new Audi S7 and a Mercedes CLS 400d against each other, Audi having fascinatingly dropped petrol from an ‘S’ model for the first time in history in order to shine an ever brighter light on its impressive 48V ‘mild hybrid’ TDI diesel technology, which we tested in our new A7 Sportback review.

The new diesel-powered Audi S7 shoves out a phenomenal 516lb ft or 700Nm torque yet still averages in the mid-30s in terms of fuel economy, while the Alpina is even cited as good for just under 45mpg as an NEDC equivalent figure, making them all more fuel-efficient than comparably fiery petrol iterations that will also emit more than the 170g/km CO2 this trio manage. 

Diesels relating to the environment and public health

Diesel cars may well emit more particulate matter (PM) and nitrogen oxide (NOx) pollutants into the atmosphere than petrol vehicles, which understandably poses public health and air pollution quality concerns, but they emit less CO2, so it’s a case of swings and roundabouts. AdBlue and diesel particulate filters (DPF) are also helping to clean up diesel cars’ act, but these can prove problematic for drivers mainly sticking to short, slow journeys which don’t allow the car to heat up like long motorway drives do – again reinforcing the 12,000 miles per annum threshold argument or rule for petrol vs diesel debates.

New BMW 3 Series 320d vs Tesla Model 3

On a tangentially related note, Auto Express magazine recently put the new Tesla Model 3 electric saloon up against the company car sector’s revered stalwart, the BMW 3 Series, which is actually around ￡1,850 more expensive than the Standard Range Plus variant of Elon Musk’s new creation. The Model 3 is the first Tesla enabled for CCS rapid-charging of its battery from flat to 80% in around 25 minutes, and Auto Express reckons it’ll cost roughly ￡350 per year or 3ppm to keep fed with electricity, which is much cheaper than even the remarkably frugal BMW 320d, stated as 11p/mile.

The zero-emissions Tesla Model 3 is rated 16% in BIK while the BMW sits at 30%, costing their tax-paying drivers ￡2,300 and ￡4,565 per annum respectively. They also forecast that the Tesla will retain just less than 69% of its residual value but the BMW will only be worth 45% after 3 years. Their conclusion was that “the Model 3 proves that now is the time you can buy an EV instead of an ICE car”, but they again included the commonly-found caveat that anyone driving more than 12,000 miles per year is still probably better suited to something like the diesel BMW until charging infrastructure and recharging times improve even further.

Summing up

The UK government is set to ban the sale of diesel cars by 2040, but this is frankly a long way off and not many people keep their cars for 21 years even if they’ve bought them rather than opted to lease one, which is itself becoming more and more popular.

Someone driving a larger car and covering more than 12,000 miles each year should still consider diesel without doubt, especially if they regularly carry rear passengers, heavy luggage or other items, or have the need to tow or go off-road. Leasing customers living in expansive rural areas may also be wise to consider diesel options still, as electric car charge point infrastructure may well be too patchy to rely on.

The Telegraph recommends the new Audi S4, which is now diesel-powered, along with the new Ford Focus and the Land Rover Discovery as sensible choices in this fuel category, for differing reasons, while What Car? magazine highlights the Volkswagen Touran, Mazda CX-5, Skoda Superb, Audi Q5 and Q7, BMW 5 Series and Range Rover Evoque as top diesel models, with the Volvo XC40 D3 their top recommendation.

Jaguar Land Rover informs its prospective customers with the same advice over the 12,000-mile rule, which obviously shouldn’t be taken pedantically to collar someone who drives just 12,005 miles in a year, and on the subject of what future diesel has, JLR believes that the fuel still has a life over the next few years although they are concurrently pouring R&D into their PHEV and EV models.

Yes, the future is electric and is already here to a degree, with the advent of increasingly usable EVs from the VW ID.3 and Kia Niro to the Audi e-tron and Mercedes EQC, but electric cars can’t yet fully compete with diesel models on every part of the spectrum, still limited in terms of refuelling practicality and towing capability – so diesel does still indeed have a place for the next few years at least and should continue to be considered by certain personal car lease customers and business fleet managers.