The Remedy for Volkswagen’s Diesel Scandal: Deliver on EV Promises

By · September 24, 2015

Audi Q6 E-Tron Quattro

VW is promising the Audi Q6 E-Tron Quattro, a 300-mile pure electric SUV, by 2018.

What a difference a few days make. Last week, Volkswagen made a strong appearance at the Frankfurt Motor Show—triumphantly unveiling a new dedicated electric crossover SUV from Audi, its luxury brand. The vehicle, promising more than 300 miles of range, would put VW in the vanguard of the green car market. But over the weekend, word emerged that the carmaker had for years been lying about the emissions of its so-called “clean diesel” cars, which actually contribute smog emissions up to 40 times beyond the legal limit in the United States.

Those revelations seriously undermined any notions of VW as a company that cares about cutting-edge eco-friendly technology. Eleven million vehicles worldwide will be affected by a recall, with fines and lawsuits likely to cost tens of billions of dollars. On Wednesday, Martin Winterkorn, Volkswagen’s chief executive, resigned.

VW had promised drivers the ability to drive a sedan offering the superior performance and fuel economy of a turbodiesel—without spewing massive quantities of smog-forming chemicals and without special treatment systems that add cost. That was a lie.

How can Volkswagen reform its reputation as a green carmaker? Maybe the events at Frankfurt last week provide clues. Winterkorn told reporters that VW plans to release 20 different EV and plug-in hybrid models by 2020. For Volkswagen, plug-ins could be a lifeline.

Mapping an Electric Future

In September, Volkswagen’s eGolf was the fifth best selling pure EV in the United States. VW has sold more than 2,500 units to date. It’s more or less a Nissan LEAF for people who prefer Volkswagen styling and handling, and are willing to pay more for the privilege.

VW E-Golf

Sales of the VW E-Golf have so far been modest.

The auto conglomerate’s biggest U.S. release to date will be the Audi A3 E-Tron plug-in hybrid, which hits dealerships in North America this fall. The A3 plug-in has an expected electric range of 31 miles and will start at about $32,000 after federal tax incentives and delivery fee. It will be available in all 50 states, and could be the VW group’s highest profile plug-in car.

But to truly earn a reputation as an electric vehicle maker, Volkswagen AG will need to follow through on concepts like the Audi Q6 E-Tron Quattro. That’s the company’s electric crossover boasting a projected range of about 311 miles. Audi said the Q6 E-Tron is headed to market in 2018, based on a concept outfitted with enough tech-features to earn a look from even the most diehard Tesla enthusiast.

Also at Frankfurt, Volkswagen debuted its own branded crossover plug-in concept, the Tiguan GTE. The Tiguan is a plug-in hybrid that pairs an electric powertrain with a turbocharged gas engine to produce a peak of 215 horsepower. That’s a lot of power for a relatively affordable crossover SUV, especially one shooting for a combined efficiency rating of about 150 MPGe. Volkswagen didn’t say when we might see the Tiguan go into production.

VW also showed off an electric Porsche: the Mission E. It’s not only another 300-mile EV, but allows for 800-volt charging that could potentially charge the car’s huge battery to 80 percent in a mere 15 minutes.

Porsche Mission E

Porsche Mission E

For Volkswagen (and the auto industry), the dream of inexpensive clean diesel might be dead. Even if carmakers could deliver on VW’s false technological claims, the standard by which car companies can claim green status has shifted away from petro-burning cars that use less fossil fuel—to an era of electric propulsion.

While regulators will insist on this transition, Volkswagen—if it is to emerge from the diesel scandal—needs to go well beyond the minimal requirements of the law, and take a true leadership role in the emerging market of zero-emissions vehicles. That means making a prompt decisive shift from talking about its planned EVs, to actually producing and selling them in high quantities.

Comments

· · 2 years ago

Excellent article, as usual, Brad.

> That means making a prompt decisive shift from talking about its planned EVs, to actually producing and selling them in high quantities.

I'd love to see this, but realistically, it won't happen until
200 mile battery economics beat ICE, or a carbon tax makes fossil fuels pay the cost of their externalities and are therefore priced out of contention with electrics.

Volkswagen cheated the US regs to save $335 per car, the cost of the urea treatment system that would have brought the engine into compliance.

So for $167 million in extra profit, Volkswagen imperiled the public health (up to and including premature death) and risked $18 billion in fines, the cost of a recall retrofit, tens of billions of shareholder equity wiped out, and unknown but very significant future losses from a badly tarnished reputation, which go well past lost sales. The biggest cost (benefitting the public) is that lax enforcement of emissions standards may be tightened - with a significant positive impact on air quality and health outcomes.

You're right, it would be the right thing to do. But it will take a battery breakthrough for VW to sell hundreds of thousands of EVs. Fortunate for them that they appear to have made some investments that may deliver on the promise.

Perhaps part of any settlement agreement might be to increase those expenditures. They surely won't be making much money from selling diesels in the US any time soon.

· · 2 years ago

I would like journalist to look back at when VWs rhetoric on EVs changed. At one point they were very negative on EVs and then they became somewhat positive regarding EV deployment. I suspect that the change in their attitude coincided with the realization that they would be found out on the emissions cheating.

ecic: The economics of the 200 mile battery will beat ICE when true mass production occurs. Car makers can say they are always too expensive as long as they make them expensive through relatively low EV production rates which in turn make the battery production relatively low. Two things are happening to change that, and those are the building of Tesla gigafactory and the garnering of numerous orders by LGChem. These will be the low cost producers and they should be able to reach $175/kWhr with "in the pipe-line tech". So no discovery is necessary with the tech since it has already. The DOE predicts that EV becomes equal in cost to ICE at $150/kWhr.

Also remember that the car companies see these vehicles like trucks with hemis, in that they think they can get a premium and so will make a better than average profit on each, which will keep the price up, which they can continue to blame on the batteries. But, don't you believe it. They can make EVs for under 20K and save the planet, but they don't care about that and never will.

· · 2 years ago

Great article - very well thought out and articulated. I remember when I was looking at buying a new VW Golf 2.0l TDI last year and talking with the VW sales guy about how this sort of "clean" diesel technology could potentially revolutionize the industry... It seemed too good to be true. Glad I didn't buy into it now!

That said, I'd still be willing to consider investing in a VW e-vehicle. The VWs I currently have in my driving school's fleet are some of the most popular vehicles among our clients, and after VW survives this scandal (which, let's face it, there are precedents for their survival – GM, Toyota...) then I'd put money into VW still having a solid reputation among the majority of consumers.

And who knows, perhaps the competition of VW's promised 20 EVs by 2020 (if that actually materializes) will spur other manufacturers to produce equally as good - if not better - EVs at more competitive prices.
I guess only time will tell.

· · 2 years ago

Something not mentioned in this article is how important it was and hopefully still is for VW to produce diesel plug-in hybrids. Diesel engines can run on bio-fuel. Bio-fuel is sold along with diesel and gasoline fuel in a growing number of gas stations and it burns much cleaner than diesel. People can also make their own bio-diesel fuel if needed and when gasoline shortages ever become extreme it is a viable alternative. Also it is eco-friendly. There are currently zero diesel plug-in hybrids in the United States. Volvo makes one in Europe. For the true ultimate green car we NEED diesel plug-in hybrids so we can run on a combination of electricity and bio-fuel for a greener tomorrow. I just pray VW does not give up on this mission.

· · 2 years ago

Agree, BK. GM recently revealed that their price for the Bolt battery will be $145 kWh in 2016, and expect $100 by 2020.

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