ALL FORGIVEN?

VOLKSWAGEN’S METAMORPHOSIS TO AN ELECTRIC CAR MAKER

Just four years ago, in 2017, Volkswagen was ordered, by a US Federal Judge, to pay $2.8 billion in criminal fines for rigging diesel-powered cars to cheat on government emissions. Hiding the true level of the poisonous gas, Nitrogen Dioxide (NO2), emitting from its cars tailpipes. The software used to cheat the system hid levels of NO2 that were 40 times worse in the real world than reported. ‘Dieselgate’, as it became known, has (so far) cost VW over $30 billion in fines, penalties and settlements. VW sold its diesel cars with gusto in the 2000’s — in some cases advertising ‘Clean Diesel’ Technology. Indeed as diesel is a more efficient fuel per Km than petrol many governments began to incentivise road taxes on Diesel cars, resulting in a European Diesel love affair. Diesel is a killer fuel. Particulate Matter particles from Diesel is partly responsible for the estimated 4.3 million deaths per year due to air pollution, according to the World Health Organisation. There was never anything ‘clean’ about Diesel and the sooner it is confined to the history books the better for our air quality and climate crisis. Fast forward to today, VW just held is ‘Power Day’ event, unveiling a strategic roadmap to go ‘all in’ on battery development. Remarkably similar to last years Tesla Event, known as ‘Battery Day’, VW is now racing to transform itself into a leading electric car maker.

Volkswagen last year released its much anticipated ID.3 electric car. The Golf lookalike is its first VW electric car built from the ground up — comprising the floor plate battery pack and electric motors configuration knows as the ‘skateboard’. The ID.3 follows the previous half-hearted attempt to offer an electric car on mass, the eGOLF. This was/is an overweight, overpriced, under range Frankenstein monster who has now been very much replaced by the ID.3. VW have a great reputation for making good, reliable solid cars. My first car was a 1988 VW Golf, I loved it, drove the hell out of it and it never let me down. However, with over 80 years under their belt perfecting the internal combustion mass market machine, has VW really committed to go electric and fully renew itself?

‘Greenwashing’ and ‘Greenscaming’ are terms used to describe efforts, usually by corporations, to attempt to cleanse themselves of their climate sins through token public actions that make them appear green. A good Greenwashing example is like an oil company investing less than 1% of its profit in bio fuels then publishing huge claims about their green credentials. Beyond this there are pure lies, deliberate efforts to conceal the facts or confuse the public through mistruths. The Tobacco companies know all about this, having been fully aware of the cancer causing effects of their products while in parallel claiming their products were good for you and in some cases ‘recommended by doctors’! Big Oil and Internal Combustion Engine (ICE) makers have done the same. Oil companies knew as early as the 1950’s that carbon dioxide emissions from fossil fuel burning would warm the planet and result in dire long term atmosphere consequences. These efforts are attempts to direct the public’s attention away from their true climate destroying activities. Increasingly, and thankfully, these corporation are being ‘called-out’ on social media. Then there’s ‘Greenbashing’ — deliberate efforts to undermine others green/eco-friendly efforts, for example claiming that electric cars produce more CO2, cradle to grave, than their ICE cousins. This is totally false. Big Oil and Automakers practiced Greenbashing for decades to spread myths about electric cars, lobbying against emission standards and effectively stopping the electric car revolution from ever getting off the ground. The former US president, Mr. Trump weighed in behind these actors. The success of Tesla, the worsening climate crisis, Paris Climate Agreement and the new US Administration means the writing is on the wall for the ICE age. With numerous country and city bans on new ICE sales coming into effect from 2025 onwards, automakers now have little choice but to make the electric transition. The next driving generation is a fully electric generation and if automakers don’t quicken their pace they will be almost certainly ‘Blackberried’

So is VW still clinging on to its ICE legacy and making token efforts to appear green? No. Absolutely not. This time it is for real. This is the third coming for the electric car. A brief life around the turn of the last century saw thousands of electric cars on city streets before Fords Model T. The ICE car won then and EV’s were consigned to history until a brief resurrection in 1990 with GM’s EV1. After defeating California’s zero emissions mandate of 1990, through political lobbying, GM crushed all their EV’s and resumed their ICE strategy, shortly after releasing the Godzilla of CO2 emitters — the Hummer. GM is also now racing to transform itself to electric.

Following the shock rise of Tesla, VW is now on a real path to becoming a fully electric car maker and has ambitions to be number one. Asleep at the wheel for two decades while Tesla rose, VW is making a massive concerted effort to turn electric. Producing an electric car is entirely different to building an ICE car. Despite all their years of proficiency building ICE cars they had until now limited capacity and expertise to replicate Tesla’s now one million electric cars per year output. To do this VW needs to redesign old plants, build new plants, remove legacy inhibitors and most importantly build battery packs on a massive scale. So what was the big deal with its ‘Power Day’ announcement? The answer is a lot.

The announcements confirm VW is truly serious about becoming a global electric car goliath. In 2020 VW announced it would invest over $80 billion in electric car technologies, double the diesel gate cost to the company. Mastering battery production is number one to achieve its goals. The big stories from its power day was its plan to reduce battery costs by up to 50% and be capable of a battery recycling rate of up to 95%. Lowering battery pack costs per Kwh of energy output has been the holy grail for the past decade. The steady cost to power ratio improvements are now close to making electric cars cheaper than ICE. VW didn’t just announce an ‘economies of scale’ plan to reduce battery costs, but new production methods and technologies. These announcements are very similar to Tesla’s battery day announcements last year. They include the development of six ‘Gigafactories’ with a total production capacity of 240 giga watts of battery output to be operational by 2030. I was fortunate to visit Tesla’s first giga factory in Nevada in 2018. It was an awesome, high tech, futuristic production facility spilling out millions of batteries and battery packs in partnership with Panasonic. The, still to be completed, full factory will be the largest building on earth by surface area when fully finished. VW are doing the same, an enormous ramp up in production capacity to meet the expected exponential global demand. VW also announced partnerships for the installation of 18,000 fast-charging points across Europe. To reduce the cost and complexity of battery cell and pack production, VW plans to integrate battery management systems (mostly essential thermal controls) into the cells themselves instead of separate external battery management systems — known as a unified cell architecture. The original founders of Tesla, Eberhard and Tarpenning, perfected the orignial solution to ‘Thermal runaway’ where by rapid charging and discharge of Lithium Ion batteries could cause overheating, explosions and fires. By breaking, and going beyond, the $100 per kilowatt hour threshold for battery pack cost, VW aims to be able to once again make the affordable-by-all car.

VW isn’t doing it alone. Partnerships with BP and ARAL, for example, will see fast chargers installed in over 4,000 existing fuel stations across the UK and Germany. Other partnerships, with Enel, will tackle Italy for example. US partnerships with Electrify America will see over 3,500 points added in 2021 and in China over 17,000 points are planned by 2025 through another partnership with CAMS. VWs Group CEO, Herbert Diess, said “The transformation will be bigger than anything the industry has seen in the last century.”, “it will be fast, it will be unprecedented”.

Tesla brought the electric car back to life and revolutionised the industry, making a total zero emissions mobility future a real possibility. Electric cars still represent just a tiny 1% proportion of the 1.4 billion cars on the world’s roads today, having a minuscule impact on Co2 emissions — so far. However, with this scale of commitment from VW and a multitude of others moving to electric combined with new electric start-up’s there is a realistic glimmer of hope on the horizon. Clean air mobility worldwide and quickly is now possible. Building the new VW machine is one thing — to truly accelerate the electric revolution VW must address other areas of it legacy, like incentivising dealerships to sell electric over higher margin gas cars. To perhaps go one step further, a suggestion from me… Offer to take back all the VW gas cars sold in the past year and replace them with a new electric model. VW sold over 9 million cars in 2020, taking in $250 billion…just 2.5% were fully electric. VW is to be applauded for making a mends for its past with its new electric strategy…let’s hope they can make it happen.

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