Wed, Sep 11, 2019 - Page 10 News List

VW launches mammoth bet on electric at IAA show


A Volkswagen AG ID.3 electric car is displayed at a preview event ahead of its premiere at the VW Group night before the International Motor Show in Frankfurt, Germany, on Monday.

Photo: Bloomberg

With a new car and range sporting a spruced-up logo, German auto giant Volkswagen AG (VW) enters the Frankfurt International Motor Show (IAA) hoping its bets worth tens of billions of euros would pay off.

The new model, known as ID.3, is the highest-profile response from Germany to strict new European carbon emission limits and to battery-powered competition from the US and China.

The ID.3 was unveiled to the media on Monday, with VW chief executive Herbert Diess saying “the car for the new era is here.”

With ID.3 and its attendant range, “they can catch up the shortfall in electric mobility,” Center of Automotive Management director Stefan Bratzel said. “It has to be a success.”

Chief operating officer of the Volkswagen passenger cars brand Ralf Brandstaetter said that the sprawling group is investing hugely into polishing its image to be “younger, more dynamic and more modern.”

First in Europe, then around the world, tens of thousands of logos at VW dealerships are to be switched for the first time since 2012 — in time for the next top model’s arrival.

“We want to earn back the recognition of society,” Brandstaetter said, as the group works to put its scandal-ridden past behind it.

Four years ago, public respectability appeared out of reach for VW, as it admitted to installing software to cheat regulatory emissions tests in 11 million vehicles worldwide.

However, while “dieselgate” has so far cost VW more than 30 billion euros (US$33.14 billion), it has also become a “catalyst for electric mobility” at the firm, Bratzel said.

The first model in a broader “ID” range, priced below 30,000 euros, is a “key product” for a “key moment” in VW’s development, he added.

A slew of future vehicles are to be based on the battery-powered platform known as “MEB” that underpins the ID.3.

VW is introducing the technology just as tougher European emissions regulations enter into force.

From next year, manufacturers’ fleets must produce less than 95g of carbon dioxide per kilometer on average.

Breaching the limit means fines of 95 euros per excess gram, multiplied by the number of vehicles sold in the EU.

VW hopes to sell 1 million so-called “zero emission” vehicles per year by 2025.

More than 30,000 people have already preordered a one-off special edition of the ID.3, which costs more than the base model, but the broader German market is less encouraging.

Battery-powered vehicles make up just 2 percent of sales, while only 16 percent of Germans planning a vehicle purchase would choose an electric car, according to a poll for energy firm E.ON SE.

“They have to find a way of selling them, otherwise they’re not going to survive,” Center for Automotive Research director Ferdinand Dudenhoeffer said.

For now, electric vehicles are more expensive to build, as numbers are not yet large enough to achieve economies of scale.

“In the medium term, there isn’t any money to be made in electric cars,” Dudenhoeffer said. “By 2023 to 2024, battery production capacity will be available in Europe and prices will fall.”

VW aims to scale up as quickly as possible by agreeing to license its MEB technology to Ford Motor Corp, one element of a partnership that also includes a focus on autonomous driving.

The company has also launched a “sport utility vehicle [SUV] offensive” that is to bring its offer in the class to 30 models by 2025, from 11 at present — some of them battery-powered.

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