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VOL. 9 | NO. 13 | Saturday, March 26, 2016

VW Scandal's Potential ‘Punishment’ Fits Electric-Car Strategy

JEANNIE NAUJECK | The Ledger

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As part of its punishment for the emissions scandal, the EPA could also require VW to make electric or hybrid vehicles in Tennessee, according to several recent reports in the German press.

But that punishment might not be very painful.

Volkswagen was going in that direction even before the scandal hit, says Akshay Anand, auto-motive analyst for Kelley Blue Book.

The Volkswagen BUDD-e concept electric vehicle is making its U.S. auto show debut at the New York International Auto Show this week. Expected to have a range of up to 233 miles, it provides a glimpse into the brand’s future. Front and rear motors power all four wheels and enabling a top speed of 93 mph.

(Volkswagen.com)

In fact, auto websites have been speculating for months that Volkswagen could restyle its iconic Bus as an electric vehicle in 2017 for North America.

“They were talking about multiple pathways to alternative energy vehicles,” Anand adds. “I think they genuinely believe in electric technology and investing in it, so I think electric is going to be a core part of their vehicle lineup in the future.”

Indeed, Volkswagen’s Chattanooga expansion includes plans for a new Engineering & Planning Center that would employ about 200 people focusing on research and development. Presumably, that would include forward-looking new automotive technologies such as driverless cars and al-ternative energy.

The EPA might also require Volkswagen to help build a network of charging stations across the U.S., where drivers would eventually be able to charge their batteries in less time than it takes to fill up.

That could help lure more consumers to electric vehicles, especially if gas prices rise again. Sales of electric and hybrid vehicles were down last year as consumers reacted to low gas prices and turned away from sedans.

But electric cars won’t go mass-market until they can go at least 200 miles on a single charge, and many consumers won’t consider buying one until it can go as far as a tank of gas, Anand notes.

“There’s all these little things that people have to plan around that they don’t have to plan around for gas-powered vehicles,” Anand says.

The 2017 all-electric hatchback Chevrolet Bolt has a 200-mile range and will cost about $30,000 including tax credits, and the electric Tesla Model 3, with a similar range, will be available for pre-orders at the end of March. It costs about $35,000 before government incentives.

Tesla is building a network of fast-charging stations, as well as making extended battery life a top priority.

“I think those concerns will be allayed as the infrastructure gets better,” Anand adds.

“And the longer the car’s range is, the less the consumer has to worry about where do I charge and when do I charge. Those things need to happen before we see some significant growth in EVs.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 283 8,118
MORTGAGES 0 333 9,118
FORECLOSURE NOTICES 0 13 1,141
BUILDING PERMITS 0 644 17,711
BANKRUPTCIES 0 109 5,268
BUSINESS LICENSES 0 105 3,487
UTILITY CONNECTIONS 0 82 2,350
MARRIAGE LICENSES 0 68 1,660