Lux Research: Volkswagen In Strong Position To Go Electric In Wake Of Diesel Scandal
The future of Volkswagen and diesel cars is a big question mark.
A lot of observers see a way to recovery and reconciliation by introducing electric cars.
A similar opinion comes from Lux Research, who believes that the German manufacturer needs to accelerate efforts in electrification.
“VW is actually in a strong position to innovate their way out of this mess. They have been spending most on the R&D of any OEM (about $11 billion in 2013), and they are the largest automaker by volume. Arguably, no major OEM is better positioned than they are to decisively accelerate the push towards plug-in hybrids and electric vehicles, putting the shine back on their tarnished image. However, they probably lack the vision, leadership, and ambition to do it, so they will most likely carry on as usual after some apologies.“
Unfortunately, many of these theories about how VW will operate have now been called into question as Volkswagen CEO told old some 20,000 employees at the German HW on Tuesday that the company will be delaying or outright canceling non-essential projects as pressure mounts to slash spending.
“We will review all planned investments, and what isn’t absolutely vital will be canceled or delayed”, said Mueller in an email. “We must make massive savings to manage the consequences of this crisis.”
Are the current (and future) EV projects deemed “non-essential” or not? It is hard to say, as it is still hard to understand how the VW Group will hit emission targets without plug-in technology when the next level of emission standards is ushered into Europe in a few years.
For its part, Lux Research doesn’t seem to be convinced that Volkswagen will go the electric route. The research firm points out other aspects of Diesel Gate, like the failure of regulators, who couldn’t catch VW’s cheat:
- Regulators will try to improve, but will need better equipment. It’s striking, Lux said, that the US EPA, with its $8-billion budget and workforce of 15,000 staff, couldn’t catch VW, but a small team of researchers from West Virginia University could. Lux suggests that regulators need to revise their testing protocols for real-world performance.
- Automotive software will come under pressure to open up. OEMs have in the past successfully lobbied regulators to use the Digital Millennium Copyright Act (DMCA) to keep OEM software locked up and proprietary, and off-limits to diagnostic and repair companies the OEM does not like. The EPA has sided with OEMs, fearing that if the software is open-access, then consumers would modify it at the expense of emissions. VW misused the protection of the DCMA to the software cheat, Lux said.
- Diesel passenger vehicle sales in the US will drop drastically. Due to strict NOx emission standards in the US diesel passenger vehicles have failed to make any significant market penetration, representing less than 1% of passenger vehicles and only 3% of all vehicles on the road. In part, slow adoption was due to the requirement of installing the urea-containing SCR unit to control NOx emissions in diesel engines, which is expensive.
- AdBlue systems and renewable diesel will infiltrate Europe’s existing diesel passenger vehicle market. The Euro 5 NOx emission standard that is applicable to vehicles prior to 2015 is nearly six times more lenient than that in the US (180 mg/km compared to 31 mg/km). This has resulted in diesel powertrains present in approximately 35% of passenger vehicles and 53% of all vehicles and biodiesel making up 62% of Europe’s biofuels market.
Source: Green Car Congress