After dieselgate, Volkswagen goes electric

FRANKFURT: Volkswagen on Tuesday said it wanted to be the world leader in electric cars by 2025 as the German car giant unveiled a major shift to clean-energy vehicles in the wake of the dieselgate emissions cheating scandal.

The US market, where the pollution crisis first erupted, will play a key role in the revamp, VW brand chief Herbert Diess said, announcing a “comeback story” for the region with plans for electric cars to be built in North America from 2021.

“By 2025 we plan to sell one million electric cars per year, and by then we also want to be the global market leader in electromobility,” Diess said at a presentation of the brand’s future plans.

“Going forward our electric cars will be the hallmark of Volkswagen,” he told reporters at the VW group’s Wolfsburg headquarters in northern Germany.

Last year, Volkswagen sold 4.4 million of its own-brand passenger cars worldwide.

The company’s switch to electric will be made possible through new investments and economies of scale, Diess said, and is a crucial part of the troubled brand’s efforts to reinvent itself.

VW on Friday already announced the biggest revamp in its history, saying it would cut 30,000 jobs to save 3.7 billion euros ($3.9 billion) a year by 2020, while ramping up investment in future technologies such as electric cars, self-driving cars and digitalisation.

“Our industry will undergo more fundamental change over the next 10 years than ever before,” Diess said, predicting that “the breakthrough” of electric cars was just four or five years away and would be driven by environmental concerns.

“For most customers the electric car will soon be the better alternative,” he said.

The shake-up at Volkswagen‘s core brand comes as the group tries to recover from the biggest crisis in its history after it admitted last year to installing emissions cheating software in some 11 million diesel vehicles worldwide.

The so-called defeat devices could detect when a vehicle was undergoing regulatory tests and lowered emissions accordingly to make the cars seem less polluting than they were.

Most of the cars bore the Volkswagen logo but vehicles by other VW group companies such as Audi, Seat and Skoda were also affected.

The scandal hurt sales and damaged the reputation of the proud German company pushing the group to its first loss in over two decades last year.

But even before dieselgate, the VW brand had been struggling with profitability, weighed down by high costs and low productivity.