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Can Volkswagen Overcome the Dieselgate Scandal With Its Pivot to Electric Vehicles?

The Volkswagen Group is building a series of electric vehicles and a charging network that could give Tesla a run for its money.

The Volkswagen I.D. Crozz electric concept vehicle on display at the International Motor Show in Germany on September 12, 2017. (Image Credit: Matti Blume/Wikimedia Commons)
The Volkswagen I.D. Crozz electric concept vehicle on display at the International Motor Show in Germany on September 12, 2017. (Image Credit: Matti Blume/Wikimedia Commons)

German car manufacturer Volkswagen last week released a new advertisement that outlined the future vision of the company, focusing on its pivot to electric vehicles, but also indirectly referencing the “Dieselgate” emissions scandal that rocked the company back in 2015.

The latest advertisement from Volkswagen previews a new electric-powered minivan, named I.D. Buzz, that will be available for sale by 2022. The video zeroes in on the low point of the company with the Dieselgate emissions scandal in 2015 and how it supposedly spurred the organization to innovate and move in a different direction. A caption in the video reads, “In the darkness, we found the light.”

Since reaching a settlement with the U.S. government, Volkswagen has launched an electric vehicle charging network in the country. It’s also preparing to unveil a fleet of electric vehicles, branded the I.D. series, in the coming months. Volkswagen-owned companies Audi and Porsche will soon be offering compelling vehicles for the luxury market.

And so the Volkswagen Group—presently the world’s second-largest auto manufacturer—may actually convert short-term pain from the Dieselgate scandal into long-term gain, propelling itself into a major player in the electric vehicle market, competing with Tesla.

Electrify America May Be Volkswagen’s Path to Redemption—and Profit

As part of a settlement with the U.S. government after the emissions scandal, Volkswagen created a subsidiary called Electrify America in 2017. The carmaker invested millions of dollars into this new firm to build car charging networks across the country. Volkswagen was also forced to pay billions of dollars in fines and recalled hundreds of thousands of vehicles in the aftermath of Dieselgate.

More recently, the fruits of the decision to settle are becoming more apparent. Media reports indicate that the new Volkswagen company is focused on building the most advanced electric charging network in the country. The stations that Electrify America has set up at selected locations can power up the batteries of electric cars as fast as it takes to fuel up the gas tank, reports CNBC.

This is significant because charging speed and charge station networks are key to the widespread adoption of electric cars. In addition, the batteries that power electric cars are also getting better, with carmakers such as Volkswagen now offering products that can reach around 400 miles per one charge. New charging stations will reportedly take less than 30 minutes to fully charge these batteries.

Electrify America plans to build a nationwide electric charging network to complement the investments of the company in electric vehicles. According to a recent estimate by management consultancy firm McKinsey and Co., an investment of $11 billion is needed to establish charging stations that are accessible like gas stations to the general public in the U.S.

A report by Auto News claimed in February that Electrify America had pledged to invest in excess of $300 million to build new stations across the U.S. This investment is in addition to the hundreds of working stations around the country already set up by the company. Volkswagen faces competition from the likes of Tesla for the building of these stations.

The stations are expected to cater to the new environment-friendly cars Volkswagen will market to customers in the near future. They include the I.D., I.D. Buzz, I.D. Crozz, and the I.D. Vizzion. These cars will offer more than 250 miles of traveling on a single charge, with charging times of less than 30 minutes, according to the company.

VW Pivots to Electric Vehicles, With Tesla in its Sights

Volkswagen also owns the popular car brand called Audi, and the newest model, the Audi e-tron, is the first fully electric SUV of the brand. The automaker is also the parent company of another popular car brand named Porsche, and the new Porsche iteration, the Porsche Taycan, is also expected to be an electrically powered car.

Together, the Audi e-tron and Porsche Taycan EV could represent a one-two punch to Tesla, challenging its dominance of the U.S. electric vehicle market. Tesla’s Model 3 is the top-selling electric vehicle in the United States, according to a report in Inside EVs.

Electrify America was touted as an important indicator of the German carmaker turning a new leaf, focusing on a greener future. Since its inception, Electrify America has been involved in building electric vehicle chargers at hundreds of locations in the United States. A separate firm has been set up to look after the same affairs in Canada as well.

As electric charging infrastructure expands in the world, it is expected to encourage the sales of electric vehicles. With its emerging charging network and lineup of electric vehicles, the Volkswagen Group could position itself as the “Tesla killer.”

Usman Kabir covers science, space, and technology for Globely News. As a kid, he would make models of the solar system and take part in water rocket competitions. His childhood obsession has led him to a degree in Space Science. Usman likes to spend his free time watching reruns of "Curb Your Enthusiasm" and "Seinfeld."

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