Volkswagen revs up move to electric cars with €20bil plan

FRANKFURT: Volkswagen AG is putting its full force behind a shift into electric cars as the world’s largest automaker accelerates away from combustion engines and tries to draw a line under the emissions-cheating scandal that’s weighed on the company for two years.

Speaking on the eve of the Frankfurt auto show, chief executive officer Matthias Mueller announced sweeping plans to build electric versions of all 300 models in the 12-brand group’s line-up. The German auto giant laid out the enormity of the task ahead, vowing to spend 20 billion euros by 2030 to roll out the cars and earmarked another 50 billion euros to buy the batteries needed to power the vehicles.

Volkswagen’s plans are the most ambitious in the auto industry and reflect the company’s efforts to recover from admitting that it rigged 11 million diesel vehicles to cheat on emissions tests. The scandal set off a backlash that has led consumers to turn away from the technology amid concerns about pollution and driving bans. That creates problems for Volkswagen as it relies on diesel cars to boost profit and lower carbon-dioxide emissions to reach tightening European environmental targets.

“We have got the message and we will deliver,” Mueller said in his speech to hundreds of guests at the carmaker’s event in the German financial capital. “The transformation in our industry is unstoppable. And we will lead that transformation.”

Prior to the scandal, German automakers were hesitant about electric cars because of the high costs and limited range. Diesel, meanwhile, was a convenient choice because it generated peppy acceleration while emitting about a fifth less CO2 than comparable gasoline engines. Mueller on Monday said that diesel remains a key part of the company’s strategy. Dieter Zetsche, his counterpart at Daimler AG, said he regrets that consumers have lost trust in diesel.

Adding urgency to the push for electric cars, China over the weekend became the latest country to announce intentions to phase-out fossil-fuel powered vehicles, following the lead of the UK and France, which have outlined bans on combustion-engine models by 2040.

The move by China, the world’s biggest auto market, is sure to accelerate a global shift to electrics.