Over on the new Chrysler Blog, Product Development boss Frank Klegon has put up a post about diesels at Chrysler. Chrysler has said on several occasions that they expect diesels to eventually make up fifteen percent of the US market over the next decade, a figure comparable to what they expect for hybrids. Now that Chrysler is independent again, they intend to continue working with Mercedes-Benz on diesel systems, including the BlueTec after-treatment technologies.

The latest heavy duty Ram pickups are already compliant with 2010 Tier 2 Bin 5 standards for all fifty states. A new fifty-state legal Cummins diesel V-8 is also being introduced for the light duty trucks in 2010. Next year for the 2009 model year the Jeep Grand Cherokee diesel is being upgraded with BlueTec to also make it fifty-state compliant. All the rest of Chrysler's models that get overseas sales are already engineered for diesel installations and if diesel sales take off in the US they may bring those models here as well.

The biggest issue Klegon sees is getting people to accept the idea of a $5,000 premium for diesels, particularly clean diesels. A recent J.D. Power survey indicated that the number Americans willing to consider a diesel had doubled. Unfortunately they only indicated a willingness to pay $1,500 for the more efficient engine.

[Source: Chrysler]

Even though the Senate has now passed a new energy bill that includes requirements for fleet fuel economy average of 35mpg by 2020 we still have a ways to go before the House passes it, the bill gets reconciled and ultimately signed into law. Nonetheless, the car makers have to get down to work and start cranking up the fuel economy of their vehicles, especially the larger trucks. All three of the domestic automakers have announced plans to add new diesel engines for their light duty trucks by the end of the decade with GM announcing a 4.5L V-8 and Chrysler last week mentioning plans to add a new smaller Cummins diesel to their Ram 1500 models.

The problem with the diesels, especially the newer clean diesels, is that they are more expensive to produce than gas engines. During our recent dinner with Gary Smyth of GM he indicated that the total coast of a clean diesel powertrain is about twice that of gas. The diesel engines do work though with the new GM diesel estimated to get close to 30mpg on the highway when mated to a conventional six speed automatic. If the new engine were to be matched up to the Two-Mode hybrid system, mileage in the mid-thirties would not be out of the question for the big trucks but at an added cost of several thousand dollars.

[Source: Automotive News - Sub. req'd, thanks to Mike for the tip]

Last fall when Chrysler first showed the Dodge Avenger concept at the Paris Motor Show it had a diesel engine it. At the Detroit Auto Show, the Jeep Trailhawk concept had a Mercedes BlueTec diesel V-6 and now Grand Cherokee is available in production with the same engine. Chrysler has also indicated plans to use Mercedes diesel engines in a variety of other vehicles, including the minivans, in the coming years.

If Daimler does end up divesting itself of Chrysler in the near future, what will become of these plans? Hopefully, Mercedes will allow Chrysler to continue using their engines even in programs that haven't launched yet. Diesels offer an excellent way to dramatically increase fuel economy, and now that ultra low sulfur diesel fuel and new clean diesel emissions technology are available, oil burners have the opportunity to make some big gains.