VW builds dedicated EV sales team and considers subsidies

18 April 2017

Whereas Volkswagen (VW) seeks to dramatically change strategic direction as a result of the emissions scandal, the group also needs to push electric vehicles (EV) in order to avoid millions in fines for exceeding brand-average fleet emissions targets. In an extensive article, German newspaper Wirtschaftswoche has reported that ′VW brand head Herbert Diess has restructured the sales organisation and created a dedicated sales team for EVs’ and that VW’s management has even discussed subsidising EVs. 

PA Consulting has calculated that VW will significantly exceed the 95g CO2/km average target that will be introduced by the EU in 2021 and faces ′an annual penalty of around one billion euros. Even BMW could be around 350 million euros, only Daimler would get away without penalties thanks to strong sales of the small A-Class and economical hybrid models.‘ 

The average fleet emissions of OEMs have reduced but a VW manager told Wirtschaftswoche that the approach was ′as much climate protection as necessary, not as much as possible.’ Although the management of VW has changed and the focus is now firmly on EVs, there are still more SUVs in the pipeline before VW’s EV offensive kicks in. ′But to avoid fines, this electric offensive comes too late,‘ an advisor to the company told Wirtschaftswoche. 

Despite the EV subsidy in Germany, just €55 million has been used of the €1.2 billion that was set aside. Automobilwoche reports that ′to the end of March, there were 15,348 applications, of which 8,655 for pure battery vehicles.’ A project coordinator for an OEM told Wirtschaftswoche that ′Nobody expected it to be so bad.’ 

Aside from the SUV boom and the general lack of demand for EVs across Europe, the diesel scandal has also resulted in the share of petrol engines increasing and fuel consumption and CO2 emissions are rising again. Furthermore, the general expectation is that ′diesel will disappear much faster than we can imagine’ as expressed by EU industrial commissioner Elżbieta BieÅ„kowska, and this is a major concern. 

Whether VW will be able to meet the emissions targets and avoid penalties remains to be seen but VW managers told Wirtschaftswoche that the leadership team is ′wildly determined to avoid these imaginative penal payments‘ and subsidising EVs has already been discussed. Essentially, the preference is for funding sales promotions instead of the EU. 

As far as the sales restructuring is concerned, the four separate VW units G1 (small cars), G2 (compact cars), G3 (medium-class cars) and G4 (electric cars) have each been given their own sales teams. ′This is a huge opportunity for electric vehicles. The salesmen are part of the electric team and must be successful with this team. They report to the G4 division head, Christian Senger, and he is not so easily fobbed off with cheap explanations‘ an insider told Wirtschaftswoche.  

One VW manager even sees the positive impact of the emissions scandal: ′Dieselgate has finally brought us the new structure in e-car sales and also the modern electric platform MEB which may not have amounted to anything.‘