Volkswagen plans shift in diesel strategy to push electric vehicles

Volkswagen (VW) plans to shift attention from the diesel-emissions scandal by turning its focus to plug-in hybrids and electric vehicles.

The company intends to reduce investment in its main passenger-car brand by $1.1 billion (£71.6 million) per year and speed up existing cost-cutting initiatives. Reducing spending on developing new vehicles and upgrading factories amounts to a reduction of around six per cent in outlays.

Herbert Diess, head of the German manufacturer’s largest unit, said: “The VW brand is repositioning itself for the future, we are creating room for forward-looking technologies by speeding up the efficiency program."

VW is under increasing financial strain after it was revealed that it rigged emissions tests with defeat software in order to circumvent emissions regulations.

In a statement, the brand declared that it had begun pushing for the ‘best environmental technology’ for its diesel cars. Previously, VW used catalytic converters to break down harmful pollutants in smaller models. The same technology will now be used it its bigger diesel vehicles.

The tank currently uses AdBlue, a urea-based solution, that binds nitrogen oxides in exhaust fumes. However, the tanks make diesel models heavier, more expensive and inconvenient as they must be refilled.

VW plans to develop standardised components for electric vehicles, with ranges as far as 310 miles. The shift in technology will include redesigning the flagship Phaeton sedan as an all-electric model. A spokesman for the company has said that while plans were underway, VW still hasn’t decided where to produce the electric Phaeton.

The current model’s gasoline and diesel version will be axed and the next-generation Phaeton is expected to be fully developed by 2019-20. VW will work on a new toolkit that can be used to build compact electric passenger cars and light commercial vehicles across the group.

Stefan Brazil, head of the Centre of Automotive Management, said: “There is a real chance for VW to even extract something positive from the diesel fiasco.

"Funneling more resources into electric mobility gives them a credible future perspective to try to overcome this crisis."

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