Remember “Electric First”? VW is Backing Down on Electric Vehicles and Hoping for Growth in PHEVs - Latest Global News

Remember “Electric First”? VW is Backing Down on Electric Vehicles and Hoping for Growth in PHEVs

  • Volkswagen’s chief executive says the brand will increase its investment in plug-in hybrids to meet consumer tastes.
  • The automaker follows brands like Mercedes, GM and Ford, all of which have committed to offering more PHEVs as growth in the electric vehicle segment slows.
  • The move is a surprise move by the automaker, which has committed to going all-electric following the Dieselgate scandal.

After the TDI emissions scandal, Volkswagen handed control of the brand and empire to Herbert Diess, a German executive who is friends with Elon Musk, saw electric vehicles as the future of the industry and believed that this would be the case in an engine-less future could repair the German automaker’s poor image. But now Diess is out and his successors are rethinking their strategy.

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After Ford, GM and Mercedes, Volkswagen recently became the latest automaker to quietly back off its bold EV commitments. The brand now plans to expand its range of plug-in hybrid vehicles as growth in the electric vehicle segment slows.

Read: Mercedes abandons next-generation large electric car platform as buyers reject electric cars

Customers “now want plug-in hybrids, including in China and the US,” Thomas Schaefer, the new head of the VW brand, told Bloomberg. The automaker also recently backed out of plans to build a 2 billion euro (about $2.2 billion at current exchange rates) electric car factory in Germany and stopped looking for outside investors for its battery subsidiary – although it always has still committed to building gigafactories in Spain and Canada.

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Despite Diess’ ambitious electrification plans, the automaker is on track to exceed European emissions targets next year, prompting the new head of the Volkswagen empire, Oliver Blume, to ask the EU to ease regulations.

    Remember “Electric First”?  VW is backing down on electric vehicles and hoping for growth in PHEVs

Oliver Blume, left, and Herbert Diess, right. Photo credit: VW

It’s all a surprising turnaround for a brand that boldly claimed that electric vehicles had “won the race” in 2021 and boasted about its first-mover advantage. But the car manufacturer has probably taken on too many projects under Diess’ leadership.

In addition to creating two new platforms exclusively for electric vehicles and launching a battery subsidiary, the automaker also tried to develop the software for its vehicles, causing problems for buyers and delaying the launch of new Porsche and Audi electric vehicles.

While the automaker may be reconsidering its all-or-nothing bet on electric vehicles, it hasn’t given up on the technology entirely. Volkswagen is still looking for European partners to develop a cheap, compact battery-powered vehicle and is also working with Xpeng to regain market share in China, where consumers have abandoned foreign automakers in favor of domestic brands.

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    Remember “Electric First”?  VW is backing down on electric vehicles and hoping for growth in PHEVs

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