Volkswagen Is Betting $82.5 Billion On Electric Cars

Illustration for article titled Volkswagen Is Betting $82.5 Billion On Electric Cars
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1st Gear: Volkswagen Is Getting Serious About Electrification

The details are a bit sparse, but according to Reuters, the Volkswagen’s board is expected to approve a plan on Friday to spend $82.5 billion over the next five years on electric vehicles. That’s a lot of money! And kind of an unimaginable thing for Volkswagen to do even just a few years ago. Though, as Reuters notes, Dieselgate changed all that, swiftly shifting the company’s priorities away from internal combustion engines and toward our self-driving electric future.

The new spending is also happening at a time when VW is cutting spending in other parts of its businesses, as it tries to reshape.

From Reuters:

The emissions fraud has prompted a strategic shift to zero-emission and self-driving technology with VW now pledging to offer an electric version of each of its 300 group models by 2030.

The billions of dollars of costs VW is facing for its emissions trickery and the electric-car offensive has revived tensions at the heart of the VW group between profits and jobs, and between central control and autonomy for its 12 brands.

Company sources told Reuters last month that VW managers and unions were seeking to curb competition from lower-cost stablemate Skoda, move some of its production to Germany and make the Czech brand pay more for shared technology.

Executives and labor leaders have also been haggling over decisions on where to build electric cars and pool related resources, complicated by the influence of Lower Saxony, VW’s home state and No. 2 shareholder where six of the carmaker’s 10 German plants are located.

Again, it’s not clear where exactly the $82.5 billion will go, but for perspective, Tesla has spent about $10 billion on research and development from 2014 through the first half of this year, according to one estimate. Volkswagen, which had $217 billion in revenues last year, is a much bigger beast, and is also trying to solve many of the same problems Tesla is, with a far bigger pot of money. The race to the future continues.

2nd Gear: Jaguar Land Rover Has Been Testing Driverless Cars On Roads Of Britain For Weeks


Speaking of the future: The U.K.’s biggest automaker is also racing, like everyone else, to be one of the first to put to market a viable driverless vehicle. The British government in helping that mission has been helped by spending 20 million pounds on a project to facilitate testing in the country. The company revealed Friday that they’ve been testing driverless cars for several weeks in Coventry, in England’s West Midlands. The tests have occurred on roads with other cars as well as pedestrians.

From the BBC:

The trials have been underway for several weeks on a half-mile route in Coventry city centre.

The vehicles rely on sensors to detect traffic, pedestrians and signals but have a human on board to react to emergencies.


Last October, the first public trial of some autonomous vehicles was undertaken in Milton Keynes where small self-driving pods - two-seater cars - were allowed to navigate around a pedestrianised area in Milton Keynes.

It was part of government-backed trials aimed at promoting more widespread use of self-drive vehicles by 2020.

JLR hopes its trials will help it to understand how self-driving vehicles interact with other road users and how to replicate human behavior while driving.


Good luck, JLR.

3rd Gear: The Feds Are Investigating Possible Air Bag Failure In 415,000 Volkswagens


Volkswagen recalled the airbags in 2015, saying then that in some circumstances the airbags might fail to deploy in a crash in an airbag recall that, for once, had nothing to do with Takata. But now the National Highway Traffic Safety Administration says they’re looking into the issue.

From Reuters:

The agency said it had 90 complaints of problems after the recall was announced including some reports of problems after owners had repairs completed. NHTSA said a component of the air bag could become contaminated and cause the air bag not to deploy in a crash.

The investigation covers eight models from the 2010-2014 time frame, including the Jetta, Tiguan, Golf and Passat.


Problems after repairs had been completed does not sound good.

4th Gear: Nissan Thinks They’ve Found The Source Of All Of Their Bad Inspections

Or at least a lot of them. The problem, the company said in a report Friday, was a lack of trained staff. Nissan has recalled every car its produced for the Japanese market in the last three years as a result of the inspections scandal, about 1.2 million vehicles in total. Bad inspections at the company have been going on, in some cases, since 1979.


From Reuters:

Nissan said an investigation found that “nonconforming final inspections” were the norm by the 1990s at the plants, and could even have existed since 1979 at its Tochigi plant.

The company did not give proper consideration to inspections when cutting staff, it said in a report outlining the findings as well as countermeasures that it submitted to the government.

“Headcount reduction rates allocated to each plant applied uniformly across the whole plant, and special consideration was not given to secure final inspectors,” it said.

“Therefore, the plants had a shortage or no surplus in the number of final inspectors.”

It said it would increase the total number of final inspectors by about 85 by the end of March, an increase of over 20 percent from current levels.


The bad inspections only occurred on cars intended for the domestic market, so, unless you live in Japan—and even then—your car is probably fine. Still, it’s been embarrassing for the company at home, so much so that Nissan Chief Executive Officer Hiroto Saikawa also said Friday that he would be returning part of his compensation.

5th Gear: Ford Is Going to Spend $885 Million On Its Plant In Valencia, Spain

The money is going to toward the company’s Kuga model, a compact SUV sold in Europe that is very similar to a Ford Escape.


From a Ford press release:

The new investment brings the total sum invested in Ford’s Valencia operations to around €3 billion since 2011.

“This major investment of more than €750 million reconfirms in the clearest way our continuing commitment to the Valencia region and to Spain as one of our most important manufacturing locations in Europe,” said Steven Armstrong, president and CEO, Ford of Europe, Middle East and Africa.


Employing more than 8,000 people across all of its operations, the new investment will help to secure employment at Ford’s Valencia site. The investment builds on cost efficiency and productivity improvements by the management team, union partners and workforce.

Today, around 25 percent of all new passenger vehicles sold in Europe are SUVs. Kuga accounts for close to 50 percent of Valencia’s vehicle production volume.European sales of Kuga so far this year at 126,900 are an improvement of 22 percent compared with the same period in 2016. Kuga is Ford’s third top-selling nameplate in Europe behind the Fiesta and Focus.


Ford’s plant in Valencia, on the eastern coast of Spain, has been producing cars since 1976 and sits on 270 acres originally purchased by Henry Ford II. According to Ford, it is 6,379,367 square feet in size and employs about 3,480 workers.

Reverse: DaimlerChrysler Gets Listed On The New York Stock Exchange


Neutral: When Do You Actually Think Electric Cars Will Become A Thing?

A thing as in, many ordinary people that you and I know drive them. This question is a favorite parlor game here at Jalopnik, and we have takes, but I’m interested in yours. My guess is ten years, which I think is both pessimistic and optimistic at the same time.

News Editor at Jalopnik. 2008 Honda Fit Sport.


So many people rent and their landlords wont install a car charger and wont even let the tennents put one in if they pay for it. How are regular people supposed to charge their cars?