Germany's diesel disaster
Diesel owners across Germany are facing a disaster. Roughly a year after Stuttgart triggered a nationwide panic by warning it might have to start driving bans to meet clean air legislation, the country's highest administrative court ruled in favor of "reasonable" restrictions for diesels. The ruling is expect to cause the resale value of diesel models to plummet.
Repeated assurances from the country's powerful automakers that judges would never "expropriate" the wealth of their citizens proved to be wishful thinking.
The person most humiliated by the ruling is Chancellor Angela Merkel, whose government tried to sell with great fanfare the paltry results from a hastily arranged "Diesel Summit" last August.
The best concessions the government could extract from domestic manufacturers were free updates to diesel emissions software and a token contribution of 250 million euros to help cities tackle their air pollution.
Merkel could have lessened the blow had she prepared for this eventuality by introducing so-called "blue vignettes," a windshield sticker that indicates a car is compliant, as her cities have long requested. She ignored them at the auto industry's request, however, and now there is little hope that the stickers will arrive anytime soon given that Germany still doesn't have a new government in place five months after elections.
Last November I warned that random check points in cities to find non-compliant vehicles were a distinct possibility. Now it looks like they will become a sad reality in Hamburg, where officials have announced that police will enforce diesel bans on two routes as soon as the traffic signs arrive.
"It will be an insane amount of effort," said Duesseldorf Mayor Thomas Geisel, whose city was directly affected by the Tuesday's ruling. "Ultimately, it is also scarcely possible to implement, since you cannot simply tell by looking at a car whether it passes the muster. As long as there is no blue vignette, we would have to examine the documentation of every single vehicle."
Demand for diesels, which not long ago accounted for more than half of all new cars sold in Germany, fell to just a third last month. That number is likely to freefall as a result of the court's ruling.
There is at least one minor consolation for the owners of the 5.9 million Euro 5 diesels on German roads. The earliest they would likely face a ban is September 2019, according to the court. For the millions of people driving even older diesels, however, the picture looks a lot worse.
While the industry and government fully deserve this resounding defeat, it will be their customers and constituents who pay the highest price for their failure to act.