For years, carmakers kept pace with European Union CO2 goals by shrinking engine capacities, while adding turbochargers to make up lost power. Three-cylinder engines below one liter have become common in cars up to VW Golf-sized compacts; some Fiat models run on twin-cylinders.
These mini-engines sailed through official lab tests conducted - until now - on rollers at unrealistically moderate temperatures and speeds. Carmakers, regulators and green groups knew that real-world CO2 and nitrogen oxide emissions were much higher, but the discrepancy remained unresolved.
All that is about to change. Starting next year, new models will be subjected to realistic on-the-road testing for NOx, with all cars required to comply by 2019. Fuel consumption and CO2 will follow two years later under a new global test standard.
Independent testing in the wake of VW's exposure last year as a U.S. diesel emissions cheat has shed more light on the scale of the problem facing automakers.
Carmakers' smallest European engines, when driven at higher loads than current tests allow, far exceed legal emissions levels. Heat from the turbos generates diesel NOx up to 15 times over the limit; gasoline equivalents lose fuel-efficiency and spew fine particles and carbon monoxide.
"They might be doing OK in the current European test cycle, but in the real world they are not performing," said Pavan Potluri, an analyst with influential forecaster IHS Automotive.
"So there's actually a bit of 'upsizing' going on, particularly in diesel."
Carmakers have kept understandably quiet about the scale of the problem or how they plan to address it. But industry sources shared details of a retreat already underway.
GM will not replace its current 1.2-liter diesel when the engines are updated on a new architecture arriving in 2019, people with knowledge of the matter said. The smallest engine in the range will be 25-30 percent bigger.
VW is replacing its 1.4 liter three-cylinder diesel with a four-cylinder 1.6 liter unit for cars such as the Polo, they said, while Renault is planning a near-10 percent enlargement to its 1.6-liter R9M diesel, which had replaced a 1.9-liter model in 2011.
In real-driving conditions, the French carmaker's 0.9-liter gasoline H4Bt injects excess fuel to prevent overheating, resulting in high emissions of unburned hydrocarbons, fine particles and carbon monoxide.
Cleaning that up with exhaust technology would be too expensive, sources say, so the three-cylinder will be dropped for a larger successor developing more torque at lower regimes to stay cool.
The turnaround on size is a European phenomenon, coinciding with diesel's sharp decline in smaller cars. Larger engines prevalent in North America, China and emerging markets still have room to improve real emissions by shrinking.
Fiat, Renault and Opel have the worst real NOx emissions among the newest Euro-6 diesels, according to test data from several countries. They now "face the biggest burden" of compliance costs, brokerage Evercore ISI warned last month.
Such reckonings are the inevitable result of on-the-road testing, said Thomas Weber, head of research and development at Mercedes, which has nothing below four cylinders.
"It becomes apparent that a small engine is not an advantage," Weber told Reuters. "That's why we didn't jump on the three-cylinder engine trend."
The tougher tests may kill diesel engines smaller than 1.5 liters and gasolines below about 1.2 liters, analysts predict. That in turn increases the challenge of meeting CO2 goals, adding urgency to the scramble for electric cars and plug-in hybrids.
VW has been far more vocal about ambitious plans announced in June to sell 2-3 million electric cars annually by 2025 - about a quarter of its current vehicle production.
"You can't downsize beyond a certain point, so the focus is shifting to a combination of solutions," said Sudeep Kaippalli, a Frost & Sullivan analyst who predicts a plug-in hybrids surge.
In future, he said, "downsizing will mean you take a smaller engine and add an electric motor to it."