New SUV Is Next Step In VW’s Post-scandal Electric Offensive

Only last week the company was able to announced that it had successfully completed three years of monitoring imposed as part of its guilty plea with the U.S. Justice Department. Under independent monitor Larry D. Thompson Volkswagen had to come up with a uniform ethics code and an expanded whistle-blower system. The company also paid more than 30 billion euros ($35 billion) in fines and civil settlements. Former CEO Martin Winterkorn faces a criminal trial in a German court and has been indicted in the U.S., though he cannot be extradited under German law.

The push into electric cars is to a great extent being driven by regulation. The European Union is from 2021 requiring car makers’ fleets to have lower levels of carbon dioxide, the primary greenhouse gas that causes global warming. The race to comply with the rules – or face steep fines that could run thousands of euros per vehicle sold – has seen companies launch more electric vehicles with better prices and longer range. The European market share jumped to 7.2% in the third quarter from 2.4% in the year-ago quarter, despite the overall slump in sales due to the coronavirus recession.

The Chinese government is also making a regulatory push for more alternative propulsion vehicles. Uptake in the U.S. has been slower as regulatory pressure has been weaker.

Stefanie Brinley, principal analyst at research firm IHS Market, said the vehicle is very significant for Volkswagen as it tries to move forward and transition from traditional engines to a more electric vehicle lineup.”