Analysis: Why the decline in diesel sales has slowed in 2022

To date, the premiums have been mainly shifting over to plug-in hybrid technology as an alternative to high-torque, relatively low-consumption diesel drivetrains that customers of these mostly larger vehicles preferred. Mercedes is the only car maker so far to blend the two to create plug-in hybrid diesels. (All other current PHEVs use petrol engines.)

But although PHEVs are far more tax efficient for company car drivers, they are more complicated and it could be that companies such as Land Rover are finding it easier to ship simpler diesels instead, in the face of ongoing shortages of chips and other parts. In July, the share of PHEV sales dropped to 5.8% for the month, against an annual total so far of 6.3%, SMMT data shows.

In other markets, drivers could be reacting to likely pushback against plug-in hybrids, which have consistently shown to have recorded far more CO2 in real-world conditions than in laboratory tests. Germany, for example, is reportedly cutting purchasing incentives for plug-in hybrids from the beginning of next year. Diesels have also had well-documented problems as far as misreporting emissions goes, but they are at least fairly consistent when it comes to CO2 output.

Diesels are also remaining stubbornly ahead of battery-electric vehicles across Europe after the historic December last year when BEVs outsold them for the first time across western Europe, data from Matthias Schmidt, author of the European Electric Car Report, shows. Missing Tesla deliveries from Covid-hit China and parts shortages affecting Volkswagen EV production are partly to blame, but rising battery prices affecting already shaky EV profitability could also be playing their part in slowing manufacturer enthusiasm.