Ethanol controversy: Are diesel cars making a comeback?

Barely five years ago, diesel looked destined for the history books. Carmakers rushed to abandon compression-ignition engines after the transition to BS6 emission norms in 2020, citing rising engineering costs, shrinking demand and an uncertain regulatory future. Maruti Suzuki led the exodus, followed by Volkswagen, Škoda, Honda, Renault, Nissan, MG and Audi. Diesel, it seemed, had become collateral damage in India's march towards cleaner mobility.

Now that greater uncertainty looms over the fate of petrol – despite the pause on further ethanol blending – brands are strongly reconsidering their strategy around diesel, as the possibility of higher ethanol blends still lies on the not-too-distant horizon. Chief among them is Skoda Auto Volkswagen India Pvt Ltd, having displayed its first diesel car at the Bharat Mobility Global Expo early last year. The VW Group’s 2.0-litre turbo-diesel unit was long considered to be among the smoothest in the business before BS6 norms and the dieselgate scandal put it to pasture prematurely. According to a report by Autocar India, while the new-generation B9 Superb is expected to mark Skoda's return to diesel power in India after a prolonged absence, it is unlikely to remain the sole offering for long. Models such as the Kodiaq are also expected to gain diesel variants in the not-too-distant future. The reason? Strong demand.

More from Auto

According to Santosh Iyer, MD of Mercedes-Benz India, the demand for diesel is surprisingly strong: “We are running short on diesels, and we were pushing petrols because we didn't plan so much for diesel.”

Electric vehicles have made impressive gains, but they have not displaced diesel in the segments where it has always been strongest. Buyers covering 20,000 km or more annually continue to prioritise fuel economy, highway range and effortless cruising ability over outright acceleration or zero tailpipe emissions. For them, diesel still makes financial sense.

The market bears this out. Mahindra continues to report robust demand for diesel variants of the Scorpio-N and XUV700. Tata Motors' Harrier and Safari remain overwhelmingly diesel-driven products. Toyota's Fortuner has retained its dominance in the premium SUV segment with diesel as its core proposition, while Hyundai and Kia continue offering diesel across multiple SUVs despite steadily expanding their hybrid and electric portfolios.

Modern diesel engines typically consume 20 to 30 per cent less fuel than similarly powerful turbo-petrol units under real-world driving conditions. For large SUVs and executive sedans weighing well over 1.5 tonnes, that translates into meaningful savings over the life of the vehicle. This is precisely the territory where Volkswagen Group once excelled.

The Polo TDI, Vento TDI, Octavia TDI and Superb TDI built reputations that extended well beyond fleet buyers. They appealed to enthusiasts and high-mileage users alike because they combined refinement with exceptional long-distance efficiency. Even today, used examples command strong demand, underlining the enduring appeal of Volkswagen's diesel engineering. For Škoda, therefore, a limited diesel comeback is not simply about reviving an old powertrain. It is about reconnecting with an existing customer base that continues to value those attributes.

Factors that will continue to work against diesels

By no means is diesel poised for a broad-based revival. Meeting today's BS6 Phase II norms – and the even stricter BS7 regulations expected in the coming years – has made diesel engines significantly more expensive to develop and certify. Modern diesel powertrains require sophisticated after-treatment systems such as selective catalytic reduction (SCR), diesel particulate filters (DPFs), AdBlue injection and increasingly complex emissions calibration to comply with tightening standards. While these technologies have made diesel cleaner than ever before, they have also substantially increased manufacturing costs, making it difficult for automakers to recover their investment on mass-market vehicles priced in the ₹15 lakh to ₹20 lakh bracket.

The powertrain is unlikely to regain the market share it enjoyed a decade ago, when it accounted for nearly half of all passenger vehicle sales. Most manufacturers, excepting Skoda and VW, have made no overtures suggesting the return of diesel powertrains. Small diesel cars have all but disappeared, and few manufacturers are likely to revisit that segment. But neither has diesel become obsolete. It continues to offer advantages that hybrids and electric vehicles cannot fully replicate for customers with high annual running or frequent inter-city travel.

The industry's long-term direction remains firmly towards electrification, aided by tightening emission regulations and government policy. Diesel's future, therefore, will not be one of expansion but of consolidation.