Economy

Germany's Difficult Divorce From Diesel

Owners of diesel cars are trying to unload them in wake of a landmark ruling that could lead to urban bans on the vehicles.

A car salesman looking over used diesel cars in Stuttgart, Germany
A car salesman looking over used diesel cars in Stuttgart, Germany
Thomas Harloff

MUNICH — A recent high-court decision giving cities the right to ban diesel motors as a way to improve air quality took Germany by surprise. It's been a shock for politicians, who have no choice but to handle the issue, and for the economy as a whole, given that there's no master plan to help offset the inevitable conversion costs. The landmark ruling impacts individuals as well, particularly people whose livelihoods are directly linked to diesel.

The yard is covered in them. And judging by the snow that's piled on top of them, they've been here quite some time. They're used cars — many of them BMWs and Mercedes-Benzes, most of them diesel-operated models. Nabil Ashkar sits in his office, smoking. The used cars in his yard are now worthless. He used to sell them to dealers, but they don't want them anymore.

"The dealers have been closed for a week," Ashkar says. His only potential buyers come from Eastern Europe. "But they're aware of what's happening here, and they know the prices," he adds. The offers are so low that selling is not even worth it. Hence the vehicles keep sitting in the yard. "Yesterday, a woman asked for her down payment back," Ashkar recalls. "She didn't want a diesel car anymore."

Used car dealers like Ashkar have a problem. Last month's landmark ruling by the top administrative court, in Leipzig, is part of it. But the difficulties with diesel began even before that. In 2013, approximately half of newly registered cars ran on diesel. Last year, it was just one in three, and in February of this year, there was a 19% drop in the number of diesel cars registered compared to the same month in 2017.

As Ashkar and other dealers are discovering, there's a clear market shift to gasoline-powered cars. People are also buying electric cars and hybrids. The car market as a whole is quite lively, in fact. Despite the decrease in diesel cars, the overall number of newly registered vehicles rose 7% in February. Certainly, though, diesel is in a slow, painful decline.

We have to think about our grandchildren.

There's something almost insolent about Tesla"s new flagship store. For one thing, the U.S. electric-car manufacturer decided to open the outlet in Stuttgart, home of Daimler and Porsche. It's also located smack in the middle of a pedestrian zone. At any rate, business is booming. It's Saturday morning and the Tesla shop is brimming with potential customers.

"Our test-drive calendar is always full," says one of the sellers. The man won't give his name but say he's very enthusiastic about the Leipzig verdict. "We've had a lot of calls since then," the young man says. "The callers ask us how they can get rid of their diesel before it's worthless." He then tells them that even Tesla takes old diesel cars in payment. "Many aren't aware of that," he says.

A married couple, Gerhard and Jutta Ludwig, decide to test drive a Model X. For Jutta, it's also a question of being responsible: "We have to think about our grandchildren. They also want to live," she says.

This, apparently, is what we have come to: The purchase of a Tesla SUV with gull-wing doors is considered the epitome of environmental protection. The Ludwigs wave in a good mood and walk through the pedestrian zone to their first electric-car ride. Meanwhile, the city of Stuttgart is getting ready to lift its latest fine-particle alert. By Tuesday, though, a new warning will go into effect.

Used car dealers have a problem and last month's landmark ruling by the top administrative court, in Leipzig, is part of it — Photo: Joeb07

Taxi drivers

Frank Kuhle, 51, is chairman of the Munich Taxi Cooperative. He has been in business for 30 years and has logged countless kilometers behind the wheel. "A diesel ban in Munich would be a huge problem for taxi drivers," he says. "Many might just stop working."

Kuhle estimates that a ban would affect about 75% of Munich's taxis — some 2,000 vehicles. Not only would it hurt their bottom line; it would also keep taxi drivers from fulfilling their "duty," he argues. "We are part of the public transportation system and must drive," Kuhle explains.

The veteran cabbie thinks that as a temporary solution, taxis should be exempt from a diesel ban. For many operators, replacing diesel vehicles is all but impossible, he says. "The largest companies in our cooperative have 50 taxis in their fleet, some more, and nobody can afford that," says Kuhle. Those that do switch over would have to increase their fare rates to offset the costs, he warns. That would then draw the ire of passengers, and put cab owners at odds with the city government, which has the final say on prices.

Car buyers

Ferdinand Dudenhöffer, a car expert, and professor at the University of Duisburg-Essen, has one recommendation for diesel drivers: Stay calm! Unloading their vehicles because of a general panic would only lead to losses. "I advise them against selling their cars," he says.

Instead, they should evaluate their options, Dudenhöffer explains. Newer models with straight-five diesel engines can be exchanged. And for older models there's a scrapping premium, he says. Depending on the vehicle and manufacturer, diesel car owners should be able to get between 3,000 and 4,000 euros back.

People who don't meet those requirements should keep driving their cars, for now, Dudenhöffer adds. Yes, the ruling in Leipzig is significant. But so far, there are no actual bans in place, he explains. And if bans are instituted for specific time periods, customers can always rent a car.

There's also a silver lining in all this for people who live in rural areas and won't, therefore, be affected by any would-be bans: diesel prices are dropping! For them, driving is more affordable than ever.

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Green

In Argentina, A Visit To World's Highest Solar Energy Park

With loans and solar panels from China, the massive solar park has been opened a year and is already powering the surrounding areas. Now the Chinese supplier is pushing for an expansion.

960,000 solar panels have been installed at the Cauchari park

Silvia Naishtat

CAUCHARI — Driving across the border with Chile into the northwest Argentine department of Susques, you may spot what looks like a black mass in the distance. Arriving at a 4,000-meter altitude in the municipality of Cauchari, what comes into view instead is an assembly of 960,000 solar panels. It is the world's highest photovoltaic (PV) park, which is also the second biggest solar energy facility in Latin America, after Mexico's Aguascalientes plant.

Spread over 800 hectares in an arid landscape, the Cauchari park has been operating for a year, and has so far turned sunshine into 315 megawatts of electricity, enough to power the local provincial capital of Jujuy through the national grid.


It has also generated some $50 million for the province, which Governor Gerardo Morales has allocated to building 239 schools.

Abundant sunshine, low temperatures

The physicist Martín Albornoz says Cauchari, which means "link to the sun," is exposed to the best solar radiation anywhere. The area has 260 days of sunshine, with no smog and relatively low temperatures, which helps keep the panels in optimal conditions.

Its construction began with a loan of more than $331 million from China's Eximbank, which allowed the purchase of panels made in Shanghai. They arrived in Buenos Aires in 2,500 containers and were later trucked a considerable distance to the site in Cauchari . This was a titanic project that required 1,200 builders and 10-ton cranes, but will save some 780,000 tons of CO2 emissions a year.

It is now run by 60 technicians. Its panels, with a 25-year guarantee, follow the sun's path and are cleaned twice a year. The plant is expected to have a service life of 40 years. Its choice of location was based on power lines traced in the 1990s to export power to Chile, now fed by the park.

Chinese engineers working in an office at the Cauchari park

Xinhua/ZUMA

Chinese want to expand

The plant belongs to the public-sector firm Jemse (Jujuy Energía y Minería), created in 2011 by the province's then governor Eduardo Fellner. Jemse's president, Felipe Albornoz, says that once Chinese credits are repaid in 20 years, Cauchari will earn the province $600 million.

The Argentine Energy ministry must now decide on the park's proposed expansion. The Chinese would pay in $200 million, which will help install 400,000 additional panels and generate enough power for the entire province of Jujuy.

The park's CEO, Guillermo Hoerth, observes that state policies are key to turning Jujuy into a green province. "We must change the production model. The world is rapidly cutting fossil fuel emissions. This is a great opportunity," Hoerth says.

The province's energy chief, Mario Pizarro, says in turn that Susques and three other provincial districts are already self-sufficient with clean energy, and three other districts would soon follow.

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