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Volkswagen Continues To Spend Most Of Its R&D Budget On Fossil Fuel Transportation

At a BNEF conference in San Francisco this week, a Volkswagen board member said the company continues to invest twice as much money on development of fossil fueled cars as on electric cars. Why? Because, you know, people don’t want to buy electric cars, do they?

Recently, Elon Musk has been reminding people that the trickle of electric cars being built is not as important as the torrent of gasoline and diesel powered vehicles that continues to pour forth from the factories operated by the world’s automotive manufacturers.

Volkswagen suppliers meeting

We like to think the age of the electric car is upon us because 3,000 Tesla Model 3s got delivered to Europe yesterday or because Tesla is building a new EV factory in Shanghai. Of all the car makers in the world, Volkswagen seems to have taken the electric car revolution most seriously, promising to spend upwards of $50 billion on electric car development.

It has created a new chassis architecture designed specifically for making EVs. In fact, it says it will have dozens of EV models on the road in the next few years, all based on that MEB platform. It estimates MEB could serve as the foundation for millions and millions of electric cars.

Not only that, Volkswagen has created a new division called Electrify America which will install more than 3,000 EV chargers all across the US so EV drivers will  have less range anxiety. 100 or more of those charging locations will have Tesla Powerpack storage batteries installed to make sure there is enough electricity available during peak charging periods.

What to make of it, then, when Philipp von Hagen, who is on the executive board of Porsche SE, told the Bloomberg New Energy Finance conference in San Francisco this week that as much as Volkswagen is spending on electric cars, it is spending twice as much to continue the development of vehicles with gasoline and diesel engines?

According to Inside EVs, von Hagen was asked if Volkswagen is “all in” on electric cars. “Not really,” he replied. “The investment [in EVs] is big and consequential, but we still are making two thirds of our investment in existing drivetrain technologies.”

Porsche SE may be the largest company you never heard of. It is the financial holding company that owns the Volkswagen Group and all its brands, including Audi and Porsche. So when von Hagen speaks, he has the weight of billions of dollars of assets behind his words.

While it is exciting that the Volkswagen Group plans to have 50 electrified models in its lineup by 2030, that information has to be balanced against another statistic. In total, there are more than 300 models that fall under the Volkswagen group umbrella.

Pressed about the company’s EV plans, von Hagen placed the responsibility for continuing to invest in the development of conventional vehicles on customers. “I’m a great believer in how electrification improves the vehicles offered to consumers,” he said. “But will people buy electric vehicles?”

This is the sticking point for the electric vehicle revolution and has been since the beginning. While the average selling price for a new car in America today is over $37,000, the cost of electric cars for people who want basic transportation is still too high for many drivers. The average is driven up by the number of gargantuan trucks and SUVs that can cost as much as $100,000. It is still possible to buy a basic Civic, Corolla, or Elantra for under $20,000. There really are no worthy electric competitors available in that price range.

So while Volkswagen is spreading sunshine about its new ID electric car division, it is hedging its bets by continuing to develop gasoline and diesel powered vehicles even in the face of bans on such cars by a number of nations. You don’t have to hit these guys over the head with a brick to get their attention, but it might help get the message across to the big wigs inside the company board room.

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Steve writes about the interface between technology and sustainability from his homes in Florida and Connecticut or anywhere else the Singularity may lead him. You can follow him on Twitter but not on any social media platforms run by evil overlords like Facebook.


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