How Dieselgate Will Boost the Electric Vehicle Market
The Volkswagen Dieselgate scandal cast an unusually large shadow across the auto industry. There were the automaker’s departed executives; the recall of 11 million vehicles; a flurry of lawsuits filed; and vows from the EPA it would be more stringent in emissions tests moving forward. Nonetheless, there is potential for positive side effects for car consumers, and the list begins with a boost for the electric vehicle market.
Green car enthusiasts who had been skeptical of the Clean Diesel movement have been in I-told-you-so mode since word of the scandal broke, but the impact on the U.S. market will be minimal with TDI vehicles making up less than 1% of cars on the road. In Europe, where diesel sales are currently 50% of the market, Volkswagen faces the prospect of losing its position as top automaker in the world.
To combat its loss in standing and what is certain to be plummeting diesel sales, Volkswagen’s newly minted “brand board of management” released a summary of its plans, and the future is largely electric. The company statement pointed a new “focus…on plug-in hybrids” along with “high-volume electric vehicles with a radius of up to [186 miles]” and improved efficiency in fuel-burning vehicles.
These things are easier said than done, but Volkswagen does have several plug-in hybrids already on the market in Europe, including the Audi A3 e-tron and GTE (PHEV) versions of the Passat and Golf. Designing models from Audi and the core brand with electric technology was in the cards pre-Dieselgate, and the VW Group is wisely taking this opportunity to double down.
As for consumers on the market for green cars, the list of options just got smaller.
With diesel’s stock at an all-time low, that segment of the green car market will likely turn its attention to plug-in hybrids and pure EVs. Since late 2014, prices have veered toward reasonable. Between the 2016 Chevy Volt and multiple sub-$30,000 electric vehicles capable of 75 to 93 miles of range, consumers may finally consider them viable options as first or second cars. Taking some diesel buyers, this moment could be when plug-in sales finally crack 1% of the U.S. market.
Most consumers who had been interested in a diesel are likely to gravitate toward the range and convenience of a plug-in hybrid, which explains why Volkswagen plans to shift in that direction. These cars often exceed their range and economy rather than cheating drivers on them, which will be a useful tool in making more conversions down the road.
Still, until battery technology gets EVs above 200 miles of range at an affordable price point, the gradual upgrades in battery technology are unlikely to snatch customers away from gas cars entirely. (Volkswagen does have the e-Golf on the road as well as plans for an electric Phaeton.)
We have been impressed with the Volkswagen Group’s electric vehicle plans in the past. Considering the magnitude of the scandal and the potential for upgrades in the technology expected in the coming five years, we say it’s high time the shift to plug-ins took place. With the world’s leading automaker on board, the rollout of charging infrastructure and new electrified models will get a serious boost. Maybe it’s the kick the industry needed.