Mired in a self imposed malaise composed of equal parts diesel exhaust and corporate malfeasance, Volkswagen is trying desperately to reposition itself as an electric car company and put the stink of its emissions cheating scandal behind it. During an interview near the company’s factory in Chattanooga, Tennessee recently, Hinrich Woebcken, the newest and latest head of Volkswagen’s US operations, confirmed the German auto maker plans to build electric vehicles in North America by 2020. “We believe that this country, especially in urban mobility, will have a very strong shift from petrol engines into hybridization and electric cars,” Mr. Woebcken said. “We are heavily investing in this one—including production in this North American region.”
Woebcken was short on details. He did not specify which models the company would build or where they would be built. In addition to the factory in Tennessee, Volkswagen also has a large production facility in Mexico. It would be good politics to build electric cars in the US to help mollify regulators who are threatening the company with billions in fines. The company has already agreed to pay nearly $15 billion to resolve legal claims brought by federal and state authorities.
Just yesterday, it was hit with civil law suits brought by the states of New York, Massachusetts, and Maryland seeking millions more. The attorneys general of those states allege senior officials conspired to mislead officials. After an exhaustive investigation, they say the fraud went all the way up to Martin Winterkorn, who was head of the company briefly before resigning in disgrace.
Last January, Volkswagen unveiled its BUDD-e concept car at the CES Show in Las Vegas. Featuring an all new chassis designed from the ground up for vehicles with all electric powertrains. It offers clues to the company’s pathway to the future.
Volkswagen’s plans to transition to electric cars is all well and good, but that leaves unanswered the question of who is going to buy them? Just yesterday, federal officials announced that automakers would get a reprieve from the proposed 54.5 mpg CAFE goal for 2025. In an announcement accompanying the release of a new Technical Assessment Report, the EPA and others said that manufacturers should be able to meet upcoming fuel economy standards using improved internal combustion engines. They won’t need hybrids, plug-in hybrids or electric cars to meet those goals, regulators say.
That can hardly be good news for a company that plans to dig itself out of a very deep hole by selling electric cars to the masses.
Source: Wall Street Journal Photo credit: Volkswagen