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The worldwide climate is altering and will continue to alter, in ways that disturb the planning of regular actions of businesses, government agencies and other organisations. The indicators of climate change comprise higher temperatures, altered rainfall patterns, and more recurrent or powerful life-threatening events such as heatwaves, drought, and storms. These risks from climate change to the human race can be reduced to a large extent by making correct choices. Although globally the Environmental Protection Agencies (EPAs) declared cars “mobile sources” of pollution, they aren’t the only culprits’ Big trucks, bulldozers, ships and boats, trains and even snow blowers also pollute the air. 

The exact impact of automobiles on the fragile environment is difficult to guess, however, hundreds of studies and researches in past 3 decades have highlighted the issues caused by the harmful CO2 and NOX emissions from automobiles. As demand on automobiles to become faster, safer and lighter it’s same for the fuel. The residual unburnt fuel in the engine not only reduces the mileage but also releases CO2 / NOX gas and harmful chemicals into the atmosphere. Particulate matter, hydrocarbons, carbon monoxide and other car pollutants harm human health. Diesel engines emit high levels of particulate matter, which are airborne particles of soot and metal. Carbon monoxide, another exhaust gas, is particularly dangerous to infants and people suffering from heart disease because it interferes with the blood’s ability to transport oxygen. 

Due to the ongoing COVID 19 pandemic entire India is in lockdown state. The only beneficiary to the massive damage caused by the virus has been the environment. In the capital of India, New Delhi, government data shows the average concentration of PM 2.5 plunged by 71% in the space of a week — falling from 91 micrograms per cubic meter on March 20, to 26 on March 27, after the lockdown began. Nitrogen dioxide went from 52 per cubic meter to 15 in the same period — also a 71% fall. Mumbai, Chennai, Kolkata and Bangalore have been recorded. 

Problem statement for India: 

There is a going to be a serious concern on the diesel car market in India. Indian diesel passenger car market is around 10 lac cars annually and it has been gradually reducing. Recently Maruti Suzuki, the biggest carmaker in India announced stopping of diesel car production effective April 2020. This would mean a loss of 3 lac cars annually. European carmakers like BMW, Mercedes though continue to produce their luxury cars, albeit small numbers.

Implementation of BS-VI has increased the diesel car prices by 1 lac on an average owing to technology upgrades. OEM’s has no choice but to implement their systems on the engine as well as the after-treatment side. Government has given no respite to them even after COVID 19 disaster. This is a piece of bad news for the auto sector in India with next inline – implementation of BS-VII probably by 2025. And this is not all; there is worse news for the auto sector in the near future. 

There are proposals in the works to make Real-Time Emission Monitoring System (RTEMS) mandatory for all cars from 2023 onwards. The basic concept of RTEMS is that there is a huge difference between testing conditions in certifying labs like ARAI and field conditions. Carmakers have been getting away with this with a lower level of emission controls settings at the controlled conditions in ARAI. (Remember Volkswagen scandal!). Volkswagen was able to cheat because certification tests are conducted on a dynamometer, much like a treadmill for cars. The software will trigger and operate the engine on ‘Test condition’ mode during certification which would be vastly different from ‘On Road’ conditions.

Already various tests conducted in Indian roads on random sampling which has shown shocking results that most of the top-selling cars exceed the emissions by 3-6 times on HC +NOX emissions. To take care of this serious issue, RTEMS could be a mandatory accessory for diesel cars. This RTEMS device is a sensor-based automatic data capturing system which monitors emissions on a real-time basis and feeds into a central computer, so Government agencies can have access to the emission data any time using Artificial Intelligence and the rogue cars can be traced. 

The cost implications of fitting this device in diesel cars are estimated to be around 2 lacs per car, so effectively diesel cars would be that much more expensive than petrol since in petrol cars it is relatively easy to control emissions. In India, there has been traditionally a cost differential between petrol and diesel by around 7/- per km. This along with higher power demand, particularly for SUVs has been a driving force for diesel cars sales.


We see a significant drop in diesel cars market post-2023, assuming Government proposal to make RTEMS mandatory of all cars goes through. Due to the technology limitation and cost implication, the carmakers would not be able to meet the price expectation of customers. Hence, they will have no choice but to discontinue the production of diesel cars. Due to recent COVID-19 pandemic, there would be added concerns all over on pollution control. The 5 weeks mandatory lockdown has proven its worth. These would be added pressures on the Government to keep cities and surroundings clean to enable people to breathe clean air.

EV will be another option which the OEMs would be motivated to make a shift from diesel. Overall we see a clear market shift as far as diesel cars are concerned. Following are drivers of this shift which are witnessed in the Indian market:

  • Technology limitation to meet stricter emission guidelines for diesel cars
  • Cost implications – extra cost of around 2 lacs per car is not sustainable in a highly cost-competitive market like India where around 80% of cars are sold in the price range of 7.5-10 lacs. Diesel cars are expensive to maintain too.
  • Environmental factors – pollution is going to become increasingly serious in the aftermath of Corona pandemic.

The impact on Tier1 companies making diesel car engine and powertrain components would be huge. We see companies like Bosch, Denso, Mahle and several of their Tier2s having a significant impact on their business. Also, we have to watch the business strategy of Mahindra whose almost 100% passenger vehicle fleet is diesel-powered today. We see a clear shift of technology from Diesel to Electric in India.

Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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