Why Volkswagen Is Betting On Electric Vehicles

Every year, the Volkswagen Group is a
top contender for the title of world’s largest automaker. The group owns not only the Volkswagen
brand for which it is named, but eleven other brands. Hailing from seven European countries,
the group sells cars, commercial vehicles and
even motorcycles. It operates 133 manufacturing plants around
the world and sells cars in 153 countries. Now this behemoth is trying to forge
a new future for itself by going electric. Just years after its
executives perpetrated what might be one of the worst examples
of corporate malfeasance in automotive history, the American people, the
EPA and their counterparts around the world have been
defrauded by Volkswagen. Opinions are divided as to how
wise Volkswagen’s bet on electric is, given that electric cars represent only
a tiny share of the global car market and face
massive infrastructural challenges. However, its sheer size and presence
across such a broad range of vehicles do suggest that if any
traditional automaker has a shot at going all in on
electric Volkswagen, is it? Volkswagen’s origins can be traced
to the engineer Ferdinand Porsche. He spearheaded the creation of what
may still be the company’s most iconic car, the type one better known
to the world as the Volkswagen Beetle. Of course, this legendary
car had a dark beginning. It was created at the behest
of Adolf Hitler, who wanted an affordable vehicle that could encourage
the widespread adoption of cars in Germany. As Hitler sought to build the fascist
utopia he had imagined in the years following World War 2, the
company rebuilt itself and began exporting its beetle first to the
rest of Europe and eventually around the world. In 1959,
seven hundred thousand Americans buy foreign cars in this one year. The car became one of the best
selling vehicles of all time with one of the longest production
runs in automotive history. It also became an icon be loved by
a wide range of buyers around the world. Some customers, particularly in
America, appreciated the cars engineering relatively small size and
superior efficiency to the large sedans Detroit automakers were
churning out in the postwar period. But in the 1970s, the
beetle began to face tougher competition from cars with new
designs that offered more interior room and trunk space. The Beetle also struggled to meet
emerging fuel economy and safety standards taking hold in the U.S.. So in the mid 1970s, VW began
introducing new vehicles, some of which it continues to sell today. Two notable examples are the Passat
sedan and the golf compact hatchback. The golf initially sold as
the rabbit in the U.S. went on to be another
extremely popular car for Volkswagen. The automaker has sold more than
35 million golfs since 1974, which Volkswagen notes works out to one golf
sold every 41 seconds for the 1976 model year. The automaker released a version of
the golf called the GPI, which became something of a legend
in its own right. The GDI is commonly thought of as
one of the world’s first so-called hot hatches and is often credited
with creating the category that now includes countless competitors. Here was a small economical car
with a powerful engine that became popular with enthusiasts and in
racing, increasingly faced with competition from low priced and
highly reliable cars from Japanese manufacturers. The Volkswagen brand
distinguished itself as a relatively affordable brand with a
German pedigree and technical excellence. But over time, Volkswagen went
from being a brand to an automotive empire. The company now owns a large stable
of names that operate in markets all over the world and sell cars
at every price point from the very low end to almost unbelievably
expensive super cars costing several million dollars. Some brands such as Porsche were
developed by Volkswagen or by members of its founding
Porsche and Peak Families. Many others were acquired, such
as Audi, Lamborghini, Bugatti and Bentley. Key to managing such a
vast and diverse empire has been Volkswagen’s ability to design very
flexible platforms that can be used across such a
wide range of vehicles. What’s happened in the
more recent years? It’s really contributed to their not
just growth, but their cost effectiveness is these new platforms,
these global platforms that they’ve created where they can build
so many vehicles, not just for one or two, but for many of
their brands off of a starting point. That’s the exact same between the
front wheel hub and about the dashboard or firewall
is the vehicle. The company delivered ten point
eighty three million vehicles around the world in 2018,
including heavy commercial trucks. That makes it the biggest seller
of light and heavy vehicles combined. By comparison, the Renault
Nissan Mitsubishi Alliance sold ten point seventy six million and
Toyota Motor sold ten point five nine million. Volkswagen has been
especially successful in China, the world’s largest auto market. It had about 13 percent of the
Chinese market in 2018 and sold more units than any other automaker,
including Honda, Toyota and the Chinese company Gili. But the United States has often
been a weaker market for Volkswagen. Part of the reason why they haven’t
been as strong in the U.S. is they haven’t really penetrated
the pickup truck segment. They’ve looked at notable examples from
Japanese OEMs who have tried and failed. Also, VW Group is
really strong on the coasts. They aren’t really in the
heartland of the U.S. in 2018. Volkswagen’s share of the global car
market was twelve point three percent. But the company had three
point seven percent of the U.S. market. That’s not just for
the Volkswagen brand either. It includes Porsche, Audi
and everything else. Frustrated with its small share in
the country, Volkswagen said in 2007 it was stepping up its efforts
and plan to sell 800000 vehicles a year in the U.S. by 2018. But it fell far short
of that goal in 2018. The company sold just three hundred
fifty four thousand sixty four units in the U.S.. Now the automaker is pushing more
heavily into sport utility vehicles which stand to improve its
fortunes in the United States. If current trends continue. But the company’s history has been
a story of wild swings between popularity and obscurity. Volkswagen is fascinating because they’ve
had this kind of ongoing cycle in the U.S. where they do really well and they’re
kind of dominant, like with the beetle. And then, you know, they
start shrinking and market share and they’re having trouble competing. And it looks like maybe they’re
even going to leave the market entirely. And then they decide to recommit
and they come back in and they go all in on the U.S. and then they kind of build the
brand again and it starts to accelerate and they kind
of have another contraction. I mean, that’s what happened
with the diesel gate issue. You know, five, six years ago. It’s never dull with Volkswagen. They don’t they definitely not had
a consistent experience in the U.S. market over the last 50 years. Volkswagen did distinguish itself
in the U.S. market by being one of the
only automakers to commit to passenger cars that run on diesel fuel. Historically, diesel has been far more
common in Europe, where it was long supported by
government incentives. But light vehicles that run on
diesel are unusual in the United States. Diesel power trains have
long been considered more fuel efficient than their
gasoline counterparts. And Volkswagen marketed its diesel
engines as a smarter, economical and environmental choice. But its promotion of diesel eventually
blew up in the company’s face and led to the greatest scandal
in Volkswagen’s history in 2015. Revelations began to surface that
Volkswagen had devised technology to cheat on U.S. fuel emissions tests. The company had installed devices that
were designed to detect when the cars were being tested for
fuel efficiency and alter the engines performance during tests. The engine would be tuned to
boost fuel economy and meet U.S. government standards. But in real
world conditions, the engine would revert to its default setting,
which sacrificed the required fuel economy for better performance. Volkswagen pleaded guilty to charges of
fraud in the United States and had to pay out more than
30 billion dollars in fines and other costs. Volkswagen has admitted guilt
to federal criminal charges, and that includes charges of obstruction of
justice and is paying a four point three billion dollar fine
in the emissions cheating scandal. Top executives resigned, including CEO
Martin Winterkorn, who stepped down in September of 2015. The company is still
reeling from the fallout. Winter corn and four other
top Volkswagen executives were charged with fraud in Germany
in April of 2019. But industry observers say that some good
has come out of the scandal for Volkswagen. The sheer financial burden
of the ordeal forced the automaker to cut costs and
streamline its manufacturing and operations, which ended
up improving profitability. It also pushed the company to
more fully embrace the growing movement toward electrification, something Volkswagen was
less eager to do earlier when it was
so invested in diesel. It also spurred the creation of
the Electrify America project, which is investing two billion dollars
in electric vehicle charging infrastructure and other programs
across the United States. In addition, it led Volkswagen to
throw its weight behind electric cars, which many in the industry
say improves the chances for electric cars to gain more traction
overall in the automotive market. The company said in 2019 that it
plans to sell 22 million electric vehicles by 2030. It has already been showing off
high profile examples of its electric future. The idea Krause
is a crossover vehicle. Volkswagen will manufacturer
in 2022. Also expected in 2022 is a
production version of the I.D. Buzz concept, a reworking of VW s
classic bus with an electric motor. Porsche is also getting
into the act. The Porsche taken is
an electric sports car. The company is unveiling in
2019 as of July. Porsche said it had already more
than 30000 reservations for the car and the company doubled its first
year production target from 20000 cars to 40000. The taken is regarded as a
potentially powerful challenger to Tesla’s performance oriented electric cars, which
have dominated the high end electric car market. Getting an automaker as massive and
varied as the Volkswagen Group behind electric cars could provide the
catalyst needed to make them truly mainstream alternatives
to gasoline vehicles. Still, many in the industry
express skepticism that most customers are as ready to go
electric as some automakers are. A lot of investors and the
street is somewhat negative on this, especially in Europe. They believe they’re going to
be fines, CO2 related fines. This VW is going to have to pay. They’re not sure of the
consumer demand for a visa. And they think that they’re going to
have to sell these these at a loss. Time will tell whether
the bet secures Volkswagen’s future. But if it works out, the
German automaker’s worst scandal could be remembered as the ordeal that
made VW even more powerful.

100 thoughts on “Why Volkswagen Is Betting On Electric Vehicles

  1. So true.
    The VW onslaught (Porche, Etron, Kombi & Golf(?) EVS), will set back Tesla 20 years. The big ones have caught up.

    God bless, Proverbs 31

  2. You also could have talked about the new electric ID.3. Volkswagen presented it on the IAA as an electric vehicle with a Golf size, but a much bigger interior size and 100% electric. But this vehicle won't come to the USA because you guys are obsessed with Pickups and SUVs.

  3. VW will compete with Tesla in 2027. By that time, Tesla would sell millions of EV and global warming would ruin many cities. VW should have gone all electric many years ago. They had the cash and could do what Tesla did, but they didn't care about people who died from global warming and diesel toxins.

  4. When you compare Deep Water Horizon, which resulted in a mass genocide to the ocean…to the VW scandal…it´s clear, that US wanted to destroy VW.

  5. Not sure what the hell that guy is trying to say about Europe not embracing electric vehicles. In Norway alone you see more electric vehicles than petrol because of the incentives they have on them. Same goes for most of Europe. And here in the states I know more people want electric that are under 40 than petrol. Most 30’s,20’s, and teens want them to protect the environment. So I can see VW really dominating this market just by size alone.

  6. I'm an American living in Germany and little by little I'm seeing more and more EVs around. I've seen the Twizy & Zoe from Renault & Tesla Model 3 are slowly catching on.

  7. Have a nephew who served a "praktikum" at the German standards & testing organization TüV, as he was completing his bachelor's in automotive engineering here in Germany. His "inside" view on the subject was illuminating : The TüV was 100% aware of the NOx issue not just with VW, but all manufacturers offering CRD engines. They were ALL gaming the US emissions testing system. What he learned was that the org. was simply not politically powerful enough to go toe-to-toe with the makers. Ironically enough, they were also aware that the algorithmic testing procedures used most US states was actually "creating" a problem. Meanwhile, measured at the tailpipe, even the largest VW diesel engines produce MUCH less NOx concentration than frying up a couple eggs in a Teflon pan. The hard reality — that numerous consumer products create NOx concentrations 10x-100x higher than "dirty" diesel engines — never even entered the hype-driven public dialogue. That said, when VW exhibited corporate denial and outright lied about the situation, they earned those swats with the economic paddle. Our mutual conclusion : VW was targeted as the "fall guy" in the US, for reasons well above our pay grade.

  8. In India we don't hate Hitler that much. He has done very little damage to our country. And World war 2 isn't even our war.
    Anyone have a different opinion?? Aaaanyone?

  9. The other reason why they don’t do well on the US is because they don’t bring cars like the RS models from audi into the US, why??? That is exactly what US drivers want with how cheap is the gas. The electric cars they have they are also horrible in performance compared to tesla

  10. Post ww2 vw was a dead duck business luckily the british decided that the defeated germans needed to rebuild industry for the health of the german economy so the brits got VW up and, running again to great success.
    Of coarse no thank yous from germany.

  11. Here's what I want for my FIRST Electric Car: I do not care about soft arm rests or back seat room! Just a BASIC Car ~ Charge on 110vac~ No Computers ~ Digital Read outs ~ 100<200 Mile range ~ $15,000 <$20,000 price. ( EX: use Beetle frame -) Do something like this and I will buy my FIRST ELECT CAR.

  12. VW is in the toilet ever since they were caught lying the way they did. People immediately think – what else are they lying about?

  13. I loved those Nazi alloys on the first new electric car shown. This guy is completely lying about dieselgate. Can you believe the rest of the article? Varfrumthinkem.

  14. Shame on the video editor who is guilty of committing the video atrocity of BBC (Blow-up, Blur, Crop) 4:3 aspect ratio films and video (or 4:3 films transferred to video) to fill the 16:9 frame. Doing "click to fill" may look OK on a computer screen (other than the unnaturally overly large images) but on a TV the loss of resolution is terrible. You are taking standard definition video and degrading it to substandard definition video. You are also altering/censoring the carefully composed and framed 4:3 aspect ratio images by the historical cinematographers and videographers. Leave 4:3 alone! And, don’t BBC 4:3 photos, either.

  15. Boycott this criminal Polluter criminal acts of emission killed thousands of people! 💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀💀

  16. I really hope every car manufacturers go Electric & Zero Gasoline or Diesel cars for the next 2 years they all really need to contribute to stop pollution and global warming.

  17. The original, air cooled, classic vw beetle was not I repeat not a victim of poor efficiency. Rather, it was the emissions of the air cooled ice vs. emissions of a water cooled ice and safety that did that venerable vehicle in in the u.s.

  18. The Volkswagen Beetle design was stolen from a Czech company called Tatra, Volkswagen has had no right to make the money they made off of the back of a stolen design.

  19. Me thinks a large segment of consumers are ready for electric cars. personally pledge to make my next new car purchase an electric car my gut tells me it's a VW.

  20. Every day we wait to go electric is Billions of dollars for big oil and other that profit from those polluting cars that clog our streets and ruin our health

  21. Well that settles it. Won't be buying an electric car. The last VW we had was a Rabbit. Car was in the shop more than our driveway. VW did not fix the car. We replaced it with a Toyota. Dieselgate was a public demonstration of their corporate ethics, or lack thereof. Enough said.

  22. The street is wrong about EVs. People really want them. FUD from the vested fossil interests and lazy click bait media reports will dissipate as more and more people realize they don't need to buy gas any more.

  23. Going electric is the right direction for automaker, fail to adapt then automaker deserve to be part of history just like Kodak when Digital Camera emerge, and Nokia when Smartphone become global.

  24. Why Volkswagen is betting on an industry they couldn't be asked to enter until Tesla proved how good electric can be, yes ofc what a bold move

  25. WRONG: The first prototype of the VW Beetle was in 1926 that's 7 years before the Hitler was voted into power. Hilter did give the go ahead for a plant to make Beetles but it was used to make military vehicles in the war (based on the design of the Beetle). The Beetle's mass production started after the war under the control of the British. Before the British started mass production the only Beetle's were prototypes.

  26. Illegal emission stastitics are done n known in the industry
    The usa under Obama dies this to vw so ford n gm has a headstart to compete
    Both can not compete in Europe with similar environment

  27. Well, then…they can 'bet' on it with just Europeans buying it since it's not coming to the North America market. And that's probably a good thing, because the VW name here is still pretty much trash. The "Dieselgate" debacle is still fresh in everybody's mind, just less than 5 years ago, and many aren't willing to give VW another chance anytime soon. Plus, it's overpriced. Around 30k Euros = $33k for a compact car with a small range and long recharge times. Not a good combination to be a seller in the US market as average consumers can get a car nearly double it's size for $25k, 400 miles of range and a 5 minute "recharge" time to full. Nope…electric cars just aren't "there" yet for the vast majority of consumers.

  28. Tesla is going to run the game of the ev market in the future. Don’t let ppl tell you other then that. Most commercial are by auto makers. They make them money. So anything other then Tesla is a bad bet.

  29. How about new form-factor of a smartphones? Why no one company like Samsung, HTC, Apple, Nokia can make new
    smartphone form-factor? Can they see that all goes to an AR-glasses and a
    wrist watches. Yep. This is could be today's reality if the owners of
    those companies can turn off their greedy. I believe China can do it

  30. Hardcore Absolute Fact: The future is 99% maintenance free vehicle, 300,000+ mile engine gaurentee, 100,000+ mile all season tires, 50+ miles/gallon cars with acceleration power of 0-60 under 3 seconds and all priced under $15,000. This includes 5/5 star safety ratings!!! Do not care if it looks boring!

  31. *greatest scandal in automotive history, not just VW history !! ! ! a good journo should get the full facts straight! (AGain to be very clear, u are not characterizing the diesel gate scandal even remotely accurately as to magnitude. You have missed the real story, and thus this story is very very weak, and could even be said to be towing the line and kissing up to one of the two largest car makers on earth, and one of the biggest co's in the world. Shame on you Cnbc, formerly my fav channel and group of journo's. Looks like u've dropped in excellence

  32. Wow now I know I should never buy VW car due to the brand being associated with Hitler and diesel scandal, these guys are murderers…

  33. Dieselgate.
    Only in the US would cars be allowed 50 mpg as of 2005 and the Bush Administration. So you buy a VW that gets 64mpg and VW gets fined for it.
    Remember 2/3 of all the World's vehicles are diesel.
    I really think CNBC research Dept needs a history lesson.
    VW built it's first US plant in 1978 in Pennsylvania and was forced to sell it to Chrysler which sold DIESEL CHRYSLER OHMNIS, reskined Rabbits. That saved Chrysler.

  34. *8:11 the words are mixed up, it wasn't a fuel economy, it was emissions! In fact, because they were using cheat software, they got higher fuel economy at the sacrifice of emissions! 😉

  35. Almost every car manufacturer was (and probably still is in some places) using the software to cheat emissions tests. The reality is diesel engines are nowhere near as dirty as they are made out to be, burning a candle in your home produces more 'pollution' than what comes out of a modern diesel cars exhaust. It's all politics, obviously in no way is lying about it and denying it like VW did the right thing to do, and they got what they deserve. However they were just the 'fall guy' and there are very few large cooperations in the world that arn't doing or haven't done something criminal. So is the sad reality we live in.

  36. So the answer for this title starts at min.9:15🤷🏻‍♂️
    As for the divine future of electrical vehicles :))) it’s only about money and that only 😉

  37. I wish they would bring the diesel back to North America. It is going to be decades before electrics work in more remote regions.

    Sure they emitted higher than they were suppose to when operating at the top end but for normal driving it should not have been an issue. You can also look at all the manufactures that are now bringing diesels into lighter vehicles. Diesel should be utilised more

  38. stop talking about VW emissions and take a close look at American made semi trucks that do 6-8mpg whereas european trucks do 12mpg+

  39. Remember that "Diesel scandal" well my 2015 golf TDI was doing 40-45mpg in the city! 13 gallon diesel tank would last for almost 600 miles. Fuel efficiency isn't economically viable for big oil, therefore artificial scandal

  40. I do believe that more customers in the US will be interested in electric vehicles once the infrastructure of charging improves, as well as prices go down on electric vehicles. But for the time being, trying to sell small electric cars for $40,000, and if you want a decent truck or SUV that's electric, you're looking at upwards of $70,000, will likely be a tough sell. Fact of the matter is, new car sales in America have been struggling as a whole with gasoline powered vehicles simply because the masses have not had the income to keep up with how expensive new cars have become, causing the used car market to be the current booming trend in the automotive world. So it will be interesting to see if they can convince not only the buying public to go electric, but to invest in buying a new car altogether.

  41. VW has launched the peoples car that started the cheap and affordable car including its design for easy maintenance and lower fuel consumption. VW now is again the same right direction, the electric car, to make it affordable and dependable. Tge recent event in saidi arabia has stressed the necessity towards such new direction in car manufacturibg.

  42. Biggest car manufacturer in the world? Even VW gave up on that claim to fame. They have a lot of catching up to do with EV;s which are limited to maybe 3% of the auto market. But then, how many companies can absorbe tens of billions of dollars in losses and stay in business, much less come out smelling like a rose..

  43. This video is centered around the history of VW in the US. For goodness sake, what happened to every other country in the world. ?????

  44. Upon writing this, i was about to say "did you even try to call Porsche how to pronounce 'Taycan'?"

    Until i found out Porsche made a video about it…lol https://youtu.be/t8oixMu703s

  45. I disagree with the statement that there is no demand for EVs in Europe. If it was for the consumer, we would see a lot more Kona's and Nero's around.

  46. The "illegal emission" scandal lead by the glorious US EPA is one of the best insidious anti competition strategies ever used by an government environment protection agency . Long live the US world order! VW learnt their lesson to submit to US domination , they have combined with Ford. All is well again in the US dominated world order 😌 Although wait the pesky Chinese arent obeying the US imposed world order. How dare they!!!🤬 Long live Murica

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