In a statement released by Volkswagen’s Board of Management on Tuesday, the company said it will shift its focus toward developing electric vehicles. This renewed focus comes a month after it was revealed Volkswagen cheated emissions testing in some of its diesel cars, putting the company in the biggest crisis of its existence.
The company’s new master plan is to cut spending on the Volkswagen Brand (not the whole Volkswagen group) by $1.1 billion (1 billion euros) per year, focusing its leaner budget on the development of electric vehicles. Most notably, an electric version of its flagship luxury sedan, the Phaeton, is planned.
Volkswagen will be develop more plug-in hybrids and pure electric cars on its venerable MQB platform, which underpins a variety of its current models including the Volkswagen Golf and the Audi A3. A new electric platform its calling “MEB” will also be developed for compact passenger cars and commercial vehicles, with a 155-310 mile range targeted.
All automakers have been required to invest heavily in alternative fuel technologies to meet ever-increasing fuel efficiency and emissions standards, with Volkswagen’s investment of choice being diesel. In the U.S., where diesels made up around 25% of its sales, Volkswagen bet heavily on diesel, with large ad campaigns touting the benefits of its “clean” fuels.
Diesel tends to pollute more nitrogen oxide than its conventional gas-powered counterparts, so Volkswagen secretly used cheating software to ensure its cars would pass EPA emissions testing, all while delivering superlative performance and fuel economy on the road. These cars were designed to go head-to-head with hybrids like the Toyota Prius and Chevrolet Volt.
Now, it’s a case of “if you can’t beat ’em, join ’em” as Volkswagen will shift its development focus. Volkswagen currently offers hybrids and electric vehicles, but they’re more of an afterthought than serious competitors.
Volkswagen, along with other automakers in its portfolio, will be aiming at the Tesla with an electric version of the Phaeton luxury sedan. For those who haven’t heard of the Phaeton — which is most people — it’s Volkswagen’s attempt at making a competitor for the Mercedes-Benz S-class.
It was a true S-class competitor in every conceivable measure, except sales; it was only brought to the U.S. from 2004-06. Volkswagen still sells the Phaeton elsewhere and its toyed with bringing the next generation model to the U.S.
Plans like these are all well and good, but there’s no guarantee Volkswagen will have the money to develop any electric cars. Some estimates place the ultimate cost of the scandal in the tens of billions, which would make new car development virtually impossible.
Only time will tell if Volkswagen can set itself up to compete in the future.
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