EU Regulations

Carbon Rules Nudge VW Toward Green Goals

Germany Volkswagen
If all goes to plan at Volkswagen, we are set to see more like this e-Golf. Source: AP

These days, Volkswagen CEO Matthias Müller is fighting to leave Dieselgate in the dust and press forward to a greener future. And new regulations tightening emissions standards are pushing him in the right direction.

VW continues to profit from sales of SUVs and high powered automobiles, but is now restructuring its sales department to strengthen its electric car offerings. Starting in 2021, new models released in the EU must keep emissions down to a maximum of 95 grams of carbon dioxide per kilometer on average.

At its current rate, Volkswagen would have to pay fines of €1 billion annually and that would increase with Ferdinand Piech’s proposed release of 17 new SUVs under Volkswagen by 2020. Currently, the company only has 2.

While Mr. Piech is considered an e-car skeptic and old-school Volkswagen patriarch, his withdrawal from the company will allow VW to drive forward its green agenda, despite consumers’ continued appetite for gas-guzzling SUVs.

By the time the regulations have changed, VW will have completed its new batch of e-cars, made using its new “modular electric model” platform. Nonetheless, according to a company consultant, “this technology has come too late to avoid [billions in] penalties.”

Volkswagen is not alone: in Germany, e-cars account for only 0.6 percent of current vehicles on the road, despite generous incentives. Only 8,600 electric cars have been produced since spring 2016.

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