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Special Report July 13, 2007, 11:47AM EST

The Coming of Clean Diesels

Get ready, America: Diesel cars and trucks are cleaner than ever, and they're coming to a dealership near you

In Field of Dreams, actor James Earl Jones tells Kevin Costner's character that if he tears up his cornfield to build a baseball field, "the people will come…they will surely come." The memorable phrase most people recall is, "If you build it, they will come."

Automotive journalists and automakers, not to mention many consumers, are so enthusiastic about diesel-powered cars that the same confidence that got that fictional baseball field built in the middle of Iowa will help bring a slew of diesel options to American car buyers in the next five years.

Despite the growing attention and agendas to promote diesel cars, though, some automakers are more enthusiastic about marketing them than others. That's because American car buyers are showing a lot more interest in gas-electric hybrids than in diesel-powered vehicles, which they associate with smoke-belching trailer trucks. But because diesel fuel available in the U.S. has become a lot cleaner and automakers have figured how to prevent most of the pollution from such engines from entering the atmosphere, several companies are planning to push new diesel technology on the U.S. public in the next three years. The hope is that it will rival the popularity and demand of hybrid technology.

Some Uncharted Territory

German companies have been pushing diesel ahead of Asian and U.S. automakers; they have already made big diesel investments to satisfy the European market where some 45% of new vehicles sold are diesel. But last week, General Motors (GM) Vice-Chairman and Chief of Product Development Robert Lutz announced an ambitious new plan for diesel cars. GM plans to show a new diesel engine, on a new hybrid system called e-flex, at the Frankfurt Auto Show in September.

In GM's e-flex power train, a traditional diesel or gasoline engine recharges a battery pack that provides power for an electric motor. GM will show the same system at the Detroit Auto Show in January on a Saturn Aura. The GM diesel engine is expected to go into the European Opel Vectra in 2008 and into a Saturn in 2010.

One of the obstacles to pushing diesels is that not all 50 states have the same standards for diesel-powered cars. And GM's system, unlike the new systems of Mercedes-Benz, Volkswagen (VOWG), and Audi, are not accepted in every state. "There's a lot of hype on diesels right now. It's not going to be a 50-state solution [for GM]. It's going to be minus California, and minus what other states adopt California standards," says GM's Lutz.

Generation Gaps

Up to now, German and U.S. automakers ceded leadership in the hybrid arena to Toyota Motor (TM) and Honda Motor (HMC), in large part because those systems are costly for manufacturers to build and for consumers to buy. Meantime, since companies including Mercedes and GM have had to develop clean diesel technology for Europe in the last decade, they have been anxious to make a case for diesels in the U.S. to maximize their investment. Lutz says GM is charging ahead: "We're doing a bunch of them right now. We will be introducing diesel passenger cars in the U.S. We are going to have a V6 diesel engine for passenger cars, crossovers, and light trucks."

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