Volkswagen Hopes Fresh Logo Signals an Emission-Free Future

Date: September 10, 2019
Source: New York Times

WOLFSBURG, Germany — A crane recently lifted away the enormous VW logo that sat like a giant hood ornament atop Volkswagen’s 14-story headquarters in Wolfsburg. Sometime after dark on Monday, a crane will lower an updated one into place.

The corporate face-lift, on one of the world’s most recognizable trademarks, is part of a push by Volkswagen toward a new era of emission-free vehicles. With a new, cleaner logo, the company is eager to turn the page on a diesel emissions scandal that has cost it billions of dollars, damaged its reputation and sent executives to prison. The scandal, in fact, hastened the company’s electric ambitions.

At the Frankfurt International Motor Show on Tuesday, VW will unveil its all-electric ID.3, the first of a planned lineup of affordable, mass-produced electric vehicles. Volkswagen hopes to sell one million a year by 2025. The company’s Porsche unit will also debut its first all-electric vehicle at the show, the Taycan sedan.

“It is hard to overstate how important both these cars are for their respective manufacturers,” Tim Urquhart, an auto industry analyst at IHS Markit, said in a report ahead of the Frankfurt show. “VW needs the ID.3 to present a compelling choice for buyers that would never before have even considered buying an E.V., a true electric people’s car.”

To date, Volkswagen has lagged competitors like Renault, Nissan and General Motors in electric vehicles. But Volkswagen executives argue that the company is now going all in on electric and doing something none of its rivals have been able to achieve: sell a full-featured battery-powered car at a price that can compete with cars that run on fossil fuels.

Instead of a niche product that appeals mostly to wealthy, environmentally conscious buyers, Volkswagen executives said, the ID.3 is meant to be to electric cars what the Beetle was in its postwar heyday, the entree to a previously unattainable form of mobility.

The stakes are high as Volkswagen remains under scrutiny four years after the emissions scandal came to light. Last week, a court-appointed monitor issued an interim report that found no breaches of Volkswagen’s agreements with American officials. But the monitor, Larry Thompson, a former deputy United States attorney general, recommended that the company continue to refine a program that allows employees to report ethical or legal problems without fear of reprisal.

The ID.3, the first Volkswagen-brand car designed from the ground up to run solely on batteries, is an implicit challenge to Tesla and other companies, like Rivian or Dyson, whose backers hope to dislodge the traditional carmakers. Volkswagen is aiming to demonstrate that the future ultimately belongs to companies that know how to profitably produce cars by the millions.

Executives at Volkswagen, which last year edged out Toyota as the world’s largest carmaker, have hinted that economies of scale have allowed them to push the cost of batteries in the ID.3 below $100 per kilowatt hour. That price is considered the point at which electric cars become more affordable than internal combustion models. Analysts had not expected costs to fall that far for several more years.

Ralf Brandstätter, chief operating officer for the division that makes Volkswagen-brand cars, simply grinned when asked about rumors that the company had achieved that magic number.

“We are the company that will provide electromobility for all,” Mr. Brandstätter said last month on the sidelines of an event in Wolfsburg where the company gave reporters an advance look at the ID.3.

Another executive, who declined to be identified because the company had not officially disclosed a figure, confirmed that Volkswagen was paying less than $100 per kilowatt hour for batteries.

The car, a four-door hatchback, will go on sale this year in Europe, starting under 30,000 euros, or $33,000, in the same range as a well-equipped Volkswagen Golf. That is about €20,000 less than a Tesla Model Three in Europe, but still about €8,000 more than the starting price for a Renault Zoe, an electric subcompact.

The ID.3 makes a flashier impression than the Zoe and has features like a navigation system that displays information on the windshield, so drivers can keep their eyes on the road.

Still, Volkswagen’s electric push is a huge gamble. Sales of battery-powered cars in Europe rose 84 percent in the first half of the year, to 173,000, according to JATO Dynamics but they account for less than two percent of the total market, and charging infrastructure remains spotty.

Volkswagen plans to begin selling an electric car in the United States at the end of next year, but has not provided details about price. Mr. Brandstätter indicated that the model would probably be a sport utility vehicle. Initially, Volkswagen will import the cars, but plans to begin producing them at its factory in Chattanooga, Tenn., in 2022.

As Mr. Brandstätter tells it, the ID.3 traces its origins to a crisis meeting of top VW executives in October 2015.

Only a few weeks earlier, the company had confessed to rigging diesel cars to conceal illegally high emissions from regulators. Martin Winterkorn, the chief executive, had resigned. It was already clear that the scandal would lead to huge fines and devastate Volkswagen’s image.

The executives resolved to develop what they call a Modular Electrification Toolkit, a collection of components that would serve as the basis for a range of electric models with zero tailpipe emissions.

For Volkswagen, the toolkit was a major commitment to electric vehicles. The company’s strategy has long been to share as many parts as possible among its car brands, which include Skoda, SEAT, Bentley, Lamborghini and Bugatti.

Designers and engineers for the Volkswagen divisions draw on these toolkits, also known as platforms, while cultivating separate brand identities. The strategy helps hold down costs and exploits Volkswagen’s worldwide empire of factories capable of churning out more than ten million cars a year.

The scandal was a catalyst. It takes at least three years to develop a new modular toolkit. If the scandal hadn’t prodded Volkswagen to start at the end of 2015, the company might not be in a position to mass-produce electric cars today.

The decision to redesign the logo was, from Volkswagen’s point of view, almost as significant. Among other things, Volkswagen will need to replace signs at about 70,000 dealers worldwide.

The simple logo of a V hanging above a W inside a circle is the latest iteration of a basic idea that goes back to the 1930s. Volkswagen was then a Nazi propaganda exercise, a “people’s car” that would make automobiles affordable for everyone.

The initial 1930s trademark was surrounded by what looks like a whirling swastika. The new trademark looks very similar to one used in the mid-1960s, when the Beetle was the best-selling import in America.

The logo is two-dimensional, in contrast to the three-dimensional, metallic look of the logo that, with some tweaks, has been used since 1999. That logo did not reproduce well online, where Volkswagen now does most of its marketing.

Klaus Bischoff, Volkswagen’s chief designer, who designed the previous logo, said it was out of date.

“When we came up with the new car,” Mr. Bischoff said during an impromptu interview in Wolfsburg last month, “we said: ‘This doesn’t fit anymore. We need something new.’”

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