Legacy Automakers Transitioning to Electric Vehicles

In 2015, Volkswagen faced one of the largest corporate scandals ever, risking billions in fines and the trust of millions. Their emission cheat threatened to derail over 80 years of brand legacy. Yet, a few years down the line, they're not just surviving, they're thriving... In 2015, the Environmental Protection Agency (EPA) found that Volkswagen cars being sold in America had "defeat device" software in its diesel engines. This could detect when they were being tested and change performance accordingly to improve results. Volkswagen intentionally installed software to cheat emissions tests in its 2009-15 diesel cars. The software reduced emissions only during testing, otherwise, they were up to 40x the legal limit. Within days of the EPA findings, VW Group CEO Martin Winterkorn resigned after nearly a decade. Share prices then dropped 37% in 2 weeks, wiping out $26B in market value. VW set aside over $7B for direct costs, with 11M affected cars. VW skillfully handled this crisis. VW's new CEO Matthias Müller offered a full apology, saying the company had "broken the trust of our customers and the public." He admitted they "totally screwed up" and vowed to take responsibility. Müller committed to an external investigation, cooperating fully with authorities to understand the crisis and prevent it from happening again. VW America's CEO Michael Horn also apologized before Congress. Beyond apologies, VW pledged sweeping reforms focused on sustainability and transparency. It launched an independent testing program, support for TDI owners, and a US$2 billion investment in EV charging infrastructure and zero-emission vehicles. Today, VW has bounced back remarkably from the scandal and is thriving, especially in the electric vehicle space. The company invested over €30 billion in the transition to EVs and plans to stop developing new gas engines by 2026. Sales of electric models like the ID.4 and Porsche Taycan are accelerating. VW's share price has recovered and now exceeds pre-scandal levels. By fully owning mistakes, charting a bold new course, and backing words with action, VW transformed disaster into opportunity. The biggest lessons from how VW handled its emissions crisis: 1. Take full accountability without deflection or excuses. 2. Act swiftly and decisively to chart a new direction. 3. Pledge real change beyond just words. Back it up with concrete investments and actions. 4. Stay committed for the long haul. Rebuilding trust requires sustained action and industry leadership over time. Don't just do the minimum needed. 5. Have courage to be transparent and fully own mistakes. Companies can bounce back stronger through accountability. That’s a wrap. Hope you enjoyed this.

Auto Industry’s Electric Aspirations: Navigating Through Speed Bumps... The journey towards electrification in the auto industry is proving to be more tumultuous than anticipated. Prominent players like GM, Ford, and Mercedes-Benz are recalibrating their ambitious EV blueprints in light of emerging hurdles. This week, Ford disclosed a pause on $12 billion in EV infrastructure investments, citing the high cost barrier for mainstream consumers as a significant roadblock. Despite the hefty investments funneled into EV innovations, the anticipated sales surge has hit a slowdown, with customers balking at the higher price tags compared to traditional gas models. This shift in momentum reveals that while electrification remains the future, the transition might unfold over a longer timeline than initially projected. The saturation of the early adopter market coupled with cost-consciousness among the next wave of buyers is urging automakers to re-evaluate. The quest now is to strike a balance between affordability and innovation to entice a broader market transition from gas to electric. Inventory pile-up is another tell-tale sign, as dealers grapple with sluggish sales despite offering discounts. The candid acknowledgment from Mercedes' CFO about the "brutal" state of the EV market, along with GM's withdrawal from previous production targets, mirrors the industry-wide concern. The pathway to an electric future remains open, yet strewn with challenges. Patience, realistic projections, and innovative solutions to lower costs are now the keystones for automakers to smoothly navigate through these speed bumps. The long-term vision for EVs holds promise, yet the near-term necessitates a pragmatic approach to steer through the evolving landscape of automotive electrification. #ElectricVehicles #AutomotiveIndustry #EVTransition #Innovation #CostBarrier #MarketShift #FutureOfMobility

Those who follow me know what I think about the forced EV transition. It's revealing to see auto industry bigwigs now voicing similar concerns. - GM's Mary Barra noted the transition to EV is proving "bumpy," with GM retracting its near-term EV production targets. - The Mercedes-Benz USA's CFO called the EV market "a pretty brutal space," having to discount EVs heavily to move them off lots. - Toyota's Akio Toyoda and Honda's Toshihiro Mibe also expressed skepticism towards the current push for EVs, emphasizing the reality check the industry is facing. - Ford Motor Company has delayed about $12 billion in EV investments due to softening demand for higher-priced electric vehicles, emphasizing the price pressure growing the losses in their EV business. These sentiments resonate with the broader dialogue on EV affordability, energy security, and environmental efficacy. Delving deeper into the American context reveals substantial barriers to EV adoption: - Cost: High upfront costs can deter average consumers. - Infrastructure: The inadequate charging infrastructure poses a significant challenge. - Range Anxiety: Range limitations and sparse charging stations exacerbate this issue. - Cultural Attachment: The love for gas-powered trucks and SUVs is strong. - Maintenance & Repair Knowledge: The switch demands a new learning curve for many. It's noteworthy to mention that the "greenest" vehicle is a used vehicle, as the energy to produce it has already been spent. Hybrids are proving to be a viable route—they mitigate most of the emissions without encountering the hurdles listed above. They blend the best of both worlds, offering a balanced approach towards a cleaner and more sustainable automotive future. #HybridVehicles #SustainableTransition #Commonsenseenergy #electricvehicles https://lnkd.in/g27JaSpY