Volkswagen – The Reinvented Eco-Warrior

After more than three years of soul searching, strategising, cost-cutting and bare-knuckle engineering, the dieselgate bad boy has reinvented itself as a new-age eco-warrior on a mission to change the world – with a real chance it could succeed.

Armed with its modular electric-vehicle platform (MEB) and an investment commitment of 80 billion euros in future mobility projects including 30 billion for electric vehicles alone, Volkswagen has laid out its battle plan in a positioning statement entitled “Clean Mobility Is Possible”, in which it pledges to take a stand, reiterating its commitment to the Paris climate goals and claiming “Volkswagen has chosen to accept its responsibility and wants to become part of the solution instead of part of the problem”.

In effect, it has reinvented itself as a champion of the battle against climate change and has issued a call to arms to all those within its feudal realm. In a bid to spread the massive cost of its MEB, it is also taking the unprecedented step of making it available to other manufacturers. In a further move, it then issued a statement to its supply chain with the basic message: “If you want to do business with us, you have to clean up your act and join our CO2 crusade.”

It would be mighty easy, and even tempting, to go all cynical on this. And, indeed, the eyes instinctively roll at the formulation “Volkswagen has chosen to accept its responsibility”. Had it not been for the events of September 2015, it is doubtful any such radical “choice” would have been made.

In the weeks following the eruption of the scandal, while the German giant was fighting an almighty PR battle and huge names were tumbling left, right and centre, a small group of key influencers within the company, including the man who would ultimately become Group CEO, Herbert Diess, met to brainstorm a way out. An article by Automotive News describes that meeting and how “everything you see today is connected to this”.

And what matters now is that, as the world’s largest vehicle maker, it has the clout and global reach to actually make a difference and drive this thing forward.

Immediately prior to the diesel scandal, the major vehicle makers – in the western world, at least – were still insisting that the internal combustion engine had many years of useful life ahead of it and that adoption of alternative powertrains (such as electric drive and fuel cells) was still a long way off.

They looked at the risks of consumer acceptance, charging infrastructure, battery technology and the massive investments necessary to switch over wholesale to designing and building completely new vehicle architectures. They held countless brainstorming sessions, consulted industry analysts, gazed into automotive crystal balls and nodded sagely at one another over coffee at industry events and private meetings before coming to the carefully considered conclusion … nah, not yet … and proceeded to kick the can further down the road.

Remember, many of the decision makers at the very top of the automotive tree are car guys at heart. They are in thrall to the roar of the internal combustion engine while being nonetheless acutely and uncomfortably aware of its environmental impact. In the case of the German manufacturers in particular, most of the heavy hitters are engineers – smart blokes of a certain age with a firm (some might call it bloody-minded) conviction that excellent engineering can wring a few percentage points more efficiency out of their beloved internal combustion engines.

Then dieselgate came along and lit a fire under the lot of them.

It was at that meeting in October 2015 that the new guard in charge of Volkswagen decided to grasp the electric banner, smear themselves in warpaint and come out fighting – not a cool image, granted, but it was clearly one of those “go big or go home” kind of moments.

What makes dieselgate and the Volkswagen reinvention so crucial, however, is the impact this is likely to have on consumer uptake of electric mobility, within Europe at least. By finally nailing their electric colours to the mast, the German manufacturers led by Volkswagen have the opportunity to carry with them a seemingly, some might say surprisingly, high degree of brand loyalty and positive consumer sentiment. In spite of the scandal, the turbulent years since the affair have seen Volkswagen Group sales revenues rise. The VW rally cry may well also tip the scales when it comes to investment in the necessary charging infrastructure, where a certain chicken-and-egg debate has led to energy suppliers and car companies each waiting for the other to make the first move.

By cheating customers and intentionally lying to US authorities, the world’s largest car company inadvertently disrupted its own industry, arguably having a more profound impact on the ecological direction of car making than every piece of legislation, lobbying and activism combined. It cost the company close to 30 billion euros, but history – and financial markets – may well draw the conclusion that this was money well spent.

Feature image provided by the author.