Volkswagen Sticks With Diesel as Tesla Pushes Electric
Volkswagen's CEO says diesel engines will remain part of the line-up for at least another decade, despite the company's growing focus on electric vehicles and Tesla's all-electric strategy.
Volkswagen Group CEO Matthias Müller told CNBC at the 2017 Frankfurt Motor Show that diesel engines will remain part of the company’s product strategy for the next 10 to 20 years, even as the group invests heavily in electric vehicles. Müller’s comments highlight a clear divergence from Tesla’s approach, which continues to focus exclusively on battery-electric cars.
Müller said Volkswagen’s latest diesel engines are “clean” and expects combustion engines and electrified drivetrains to share the market for the foreseeable future. He argued that customers should be given the choice between conventional and electrified powertrains, and dismissed direct comparisons with Tesla, noting the vast difference in annual sales volumes between the two companies.
Tesla, meanwhile, has shown no sign of shifting from its electric-only strategy. The American manufacturer continues to expand its line-up and production capacity, including at its Fremont plant, and has no combustion engines in its portfolio. For more on Tesla’s expansion, see Tesla Fremont Plant Hits Full Output as Model S Demand Surges.
Dieselgate's Ongoing Impact
Volkswagen’s continued commitment to diesel comes as the company is still dealing with the aftermath of the Dieselgate scandal. The group recently announced a further $3 billion charge related to its diesel settlement in North America, citing the unexpectedly complex technical requirements of the fixes. The company’s legal troubles also continue, with former engine development chief Wolfgang Hatz arrested in Germany in connection with the emissions affair.
Electric Ambitions and Market Realities
While Volkswagen has announced plans to electrify much of its line-up by 2030, Müller’s comments make clear that the group does not see a rapid transition away from combustion engines. The company’s approach contrasts with Tesla’s, which has built its brand entirely on electric vehicles and is pushing to increase production and market share globally. Volkswagen’s stance suggests that, despite regulatory and market pressure, diesels will remain available for buyers who still want them over the next decade.
For Volkswagen’s efforts to bring affordable electric cars to market, see Volkswagen targets world’s cheapest electric vehicle.
