All new diesel-engined trucks and buses registered in EU member states from 1 January 2014 will need to be certified as compliant with Euro VI emissions legislation. Compared with their Euro V counterparts they will be hugely more expensive, thanks to the need in nearly all cases for a three-fold combination of SCR (selective catalytic reduction) aftertreatment, EGR (exhaust gas recirculation) and a DPF (diesel particulate filter).
The on-cost for manufacturers of upgrading vehicle specifications from Euro V to Euro VI varies widely, depending on each one’s starting point, most notably whether from an SCR or an EGR baseline. No less pertinent, at least for the first year or two following next January’s deadline, is the matter of the price increase to the customer.
The on-cost for manufacturers of upgrading vehicle specifications from Euro V to Euro VI varies widely, depending on each one’s starting point, most notably whether from an SCR or an EGR baseline
Competition will ensure that, initially, those manufacturing on-costs will not be fully reflected in Euro VI selling prices. As with earlier – albeit more modest – legislation-driven cost hikes, the truck and bus manufacturers will, in order to avoid risking loss of market share, effectively subsidise the increases, either directly through more generous percentage discounts, especially for fleets ordering vehicles in batches, or indirectly via more attractive repair and maintenance packages.
Because those Euro VI price rises, amounting to several thousand euros per vehicle, are so much higher than with any previous regulatory step-change, there is a correspondingly greater temptation for vehicle operators to ‘pre buy’, that is to bring forward their fleet replacement programmes. A company which normally replaces its trucks when they reach their fifth ‘birthday’, for example, might well, after careful cost calculation, endeavour to beat the January 2014 Euro VI deadline by ordering much lower priced Euro V chassis for delivery in December 2013 as replacements for higher-mileage vehicles which will, at that time, be only three and a half to four years old.
By how much will a late-2013 Euro V vehicle have depreciated in the ensuing five years, compared with an early-2014 Euro VI equivalent?
Those cost calculations must take account of numerous factors, some of which are not immediately obvious and cannot be determined with certainty. There is the residual value issue: by how much will a late-2013 Euro V vehicle have depreciated in the ensuing five years, compared with an early-2014 Euro VI equivalent? And will the additional Euro VI servicing costs associated with SCR and/or the DPF swing the argument against the upgraded specification? Some fleet engineers are also apprehensive about Euro VI reliability issues which could increase downtime costs. As Automotive World has reported, some EPA 2010 compliant trucks in North America with similar SCR+EGR+DPF emission packages are proving unexpectedly troublesome in service.
Then there is the big question of Euro VI fuel efficiency or, to be more exact, the cost of fuel plus that of the AdBlue urea solution reductant required for SCR systems. Most of Europe’s truck and bus manufacturers are claiming that fuel-plus-AdBlue costs for their Euro VI vehicles will be ‘no higher’ than for today’s Euro V models of equivalent performance. However, those assertions have not been made voluntarily, only under pressure from customers and the media. For all those reasons, few buyers are rushing to place Euro VI orders.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Alan Bunting has a background in engineering, and has been writing on commercial vehicle and powertrain related topics since the 1960s. He has been an Automotive World contributor since 1996.
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