by tyler | Jun 27, 2023 | cars, CNN
A Munich court has handed former Audi CEO Rupert Stadler a suspended jail sentence of one year and nine months for fraud in the 2015 diesel emissions scandal that rocked Volkswagen Group.
The ex-boss was also fined €1.1 million ($1.2 million), which will go to the German government and charities, the court said in a ruling Tuesday.
Stadler is the first Volkswagen
(VLKAF) board member to be sentenced in the affair, some four years after German prosecutors laid fraud charges against the executive. He entered a plea bargain with the court, confessing to his crimes in order to avoid spending time in jail. His sentence has been suspended for three years.
The court also delivered guilty verdicts against Audi’s former head of engine development Wolfgang Hatz and former lead diesel engineer Giovanni Pamio, handing them suspended jail sentences of two years, and one year and nine months, respectively. Hatz was fined €400,000 ($437,000) and Pamio was fined €50,000 ($55,000).
Audi
(AUDVF) and its parent company Volkswagen admitted in 2015 to having rigged diesel engines to cheat on emissions tests by using software that made cars appear less polluting in tests than they in fact were on the road.
The scandal set off years of investigations, fines and settlements that have so far cost the carmaker roughly €33 billion ($36 billion).
The affair also led German prosecutors to charge former Volkswagen CEO Martin Winterkorn with fraud in 2019. Winterkorn has yet to stand trial.
In 2021, he agreed to pay VW €11.2 million ($12.3 million) after an internal investigation found he failed to respond properly to signs that the company may have been using illegal diesel engine technology.
Stadler, who had worked for Volkswagen since 1990, agreed to pay the company €4.1 million ($4.5 million) following the same investigation. He was arrested in June 2018 in connection with the diesel scandal.
In 2019, prosecutors said Stadler knew about the manipulation of diesel engines but failed to prevent the sale of hundreds of thousands of cars with rigged software.
The charges related to nearly 435,000 Audi, Porsche and Volkswagen cars destined for US and European markets.
In separate statements, Volkswagen and Audi said they were not party to Tuesday’s proceedings, which should be “viewed independently” of proceedings against the companies that concluded in 2018.
“Audi has made good use of the crisis as an opportunity to start over. We have updated our systems, processes and checks to ensure compliance company-wide,” Audi added, noting it had since “cultivated and strengthened a culture of constructive debate.”
German prosecutors dropped criminal charges against Volkswagen and Audi in 2018 after the companies paid nearly $2 billion in fines.
— Inke Kappeler in Berlin contributed reporting.
by tyler | Jun 2, 2023 | cars, CNN
America apparently needs more car seats. So, when Volkswagen unveiled the ID. Buzz, a retro-styled electric van, last year, it noted that the version for the North American market would be longer and would have three rows of seats.
North America’s version of the ID. Buzz has now officially been revealed. “Designed and tailor-made for the North American consumer,” in the words of Volkswagen of America chief executive Paolo Di Si, this version is near 10 inches longer than the two-row model. It’s still not huge, though. At 194.4 inches, front to back, it’s about 10 inches shorter than a Chrysler Pacifica minivan, but can still seat up to seven.
The two-row version and a commercial van version available in Europe will not be sold here, Di Si confirmed.
The ID. Buzz is designed to recall the Volkswagen T1, or Transporter. That iconic model was introduced in 1949 and is better known as the Microbus, or just the VW Bus. In America, it became associated with the Hippie movement, but the Bus also provided transportation for large families long before the front-wheel-drive minivan was invented by Chrysler in the 1980s.
The ID. Buzz is expected to be available in this market in late 2024. Like the original Bus, the base version of the ID. Buzz will be rear-wheel-drive, with power coming from a motor mounted in the back. This time it’s a quiet electric motor rather than a noisy gasoline engine.
It’s also far more powerful, and faster.
The electric motor is capable of producing 282 horsepower, more than 10 times the horsepower of an early VW Bus. The new ID. Buzz will also be available with all-wheel-drive, with a total of up to 330 horsepower coming from two electric motors, one at the front and one at the back.
The all-wheel-drive version has a top speed of 99 miles per hour, while the rear-wheel-drive van can reach 90 miles an hour.
More convenient and luxurious than its counterculture elder, the ID. Buzz has power-sliding doors to access the back on both sides. It also has small inset power-opening windows located within the big glass windows in the side doors. A power tailgate in back is also standard. Inside, a removable center storage console has dividers that can be taken out and used as an ice scraper and a bottle opener.
The ID. Buzz’s second row seats slide forward to allow easier access to the third row and can fold down to allow for large cargo. The third row of seats can be removed altogether.
As in other VW ID. models, a light strip that runs across the dashboard provides helpful cues to the driver. It pulses to indicate the vehicle is ready to drive and can pulse toward one side or the other to signal a suggested turn. It also flashes if the collision avoidance system indicates urgent braking is needed.
According to VW, the original VW bus was introduced to supplement the Volkswagen Beetle, but “became a worldwide bestseller already in its first generation.” By 1967, 1.8 million had been manufactured.
The classic Microbus has become a favorite among collectors. Nicely kept versions have sold for six-figure sums. The world’s most valuable Hot Wheels car, worth as much as $150,000, is a tiny Microbus.
The new long-wheelbase ID. Buzz will be available in Europe, as well, along with the short-wheelbase version which was launched there last fall. The ID. Buzz will go on sale in the US next year. Prices will be announced closer to when the van becomes available, but are expected to start around $40,000.
by tyler | May 4, 2023 | cars, CNN
Volkswagen says it won’t cut prices to hold onto market share in China, where sales of its electric vehicles plunged in the first quarter amid intensifying competition.
Europe’s largest carmaker said Thursday that it delivered 141,000 electric vehicles in the first quarter — a 42% increase on the same period last year and accounting for 7% of total deliveries. Meanwhile, sales of plug-in hybrid vehicles increased 9% to 55,756 units. Overall, deliveries climbed 7.5% to more than 2 million units.
The automaker’s earnings were helped by a recovery in sales volumes in Europe and North America, which offset a decline in China.
Sales of all vehicles in Volkswagen’s largest market slid nearly 15% on an “already weaker preceding year,” the company said in an earnings report. “In addition to parts supply shortages, the increasing intensity of competition had a negative impact in the reporting period.”
Volkswagen delivered around 25% fewer electric vehicles than a year ago to customers in China, where its business has suffered from a price war sparked by Tesla
(TSLA).
Over the last few months, Tesla has slashed the costs of its vehicles, pushing the company’s profit margin to the lowest since 2020. It has since reversed some of those cuts, but its most popular models remain cheaper than they were at the start of the year and CEO Elon Musk recently signaled that it’s likely to stick with this strategy.
“We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margins,” he told analysts on an earnings call last month.
Volkswagen, on the other hand, indicated that it has no plans to follow Tesla’s example. “We focus on the margin of our business rather [than] on the volume side,” the chief financial officer Arno Antlitz said on a call with journalists.
Deliveries in China, including of electric vehicles, are expected to “recover significantly” later this year, in line with the growth of the car market overall, he added.
Volkswagen has begun work on two major battery factories in Europe, one in Germany and one in Spain. It has picked Canada as the location of a third facility and Antlitz said the company is in discussions with “several countries” as it scouts for potential new sites.
Earlier on Thursday, Volkswagen struck an optimistic note on its future sales. “The group continues to see strong demand, with an order backlog of 1.8 million vehicles in Western Europe alone, including 260,000 [electric vehicles],” it said in a statement.
The company’s bullish outlook on the electric car market chimes with a report last month from the International Energy Agency. The Paris-based organization said it expects sales to grow 35% this year to reach 14 million, accounting for an 18% share of the overall car market.
Volkswagen’s first-quarter revenue climbed 22% on the previous year to €76 billion ($84 billion). Operating profit declined to €5.7 billion ($6.3 billion), from €8.3 billion ($9.2 billion) in the prior period, as a result of the effects of commodity hedging.
by tyler | Apr 17, 2023 | cars, CNN
The Treasury Department has revealed which cars will be eligible for the new electric vehicle tax credits. Fewer models are eligible for the new subsidy than in previous years, but some of the most well-known EVs still qualify, according to the Monday announcement.
Under the new rule, consumers can get up to $7,500 back in tax credits on eligible cars.
Sixteen new models and some of their variations are eligible for all or half of the new credit, while nine models — mostly foreign-made vehicles — are no longer eligible, for now.
Most of the eligible cars so far are made by the “big three” EV automakers in the US — Ford
(F), General Motors and Stellantis — plus Tesla
(TSLA).
Here’s what you need to know.
2022-2023 Chrysler Pacifica PHEV
2022-2023 Jeep Wrangler PHEV 4xe
2022-2023 Jeep Grand Cherokee PHEV 4xe
2022-2023 Ford F-150 Lightning (standard and extended range)
2022 Ford e-Transit
2022-2023 Ford Mustang Mach-E (standard and extended range)
2022 Ford Escape Plug-in Hybrid
2022 Lincoln Corsair Grand Touring
2023 Lincoln Aviator Grand Touring
2022-2023 Chevrolet Bolt
2022-2023 Chevrolet Bolt EUV
2023-2024 Cadillac LYRIQ
2024 Chevrolet Silverado EV
2024 Chevrolet Blazer EV
2024 Chevrolet Equinox EV
2022-2023 Tesla Model 3 Standard Range RWD
2022-2023 Tesla Model 3 Performance
2022-2023 Tesla Model Y AWD
2022-2023 Tesla Model Y Long Range AWD
2022 Tesla Model Y Performance
Nine models, mostly from foreign brands including Hyundai and Nissan, do not qualify for the new tax credit. However, that could — and likely will — change in the coming months and years as some of these brands are building factories in the US to assemble their vehicles.
A separate tax credit applies to used EVs, and it doesn’t carry such stringent requirements on battery content or manufacturing. Used EVs qualify for less of an overall tax credit and also come with certain income requirements.
Similarly, leased vehicles can also qualify for a $7,500 tax credit without some of the strict rules about the car’s batteries and final assembly, meaning consumers who want more choice on which model to drive could settle on leasing instead of buying outright.
The list of eligible new and used EVs will be updated at www.fueleconomy.gov.
Under the new rule, consumers can get up to $7,500 in tax credits on eligible cars. There is no limit to the number of EVs automakers can sell with tax credits, as long as those vehicles meet the requirements. This is a change from the previous rule, which capped the number of vehicles that could be sold with the tax incentives.
Some cars that were previously eligible for tax credits were removed under the new rule. But administration officials told CNN more cars will be added to the list as automakers scramble to move their factories and supply chains to the US and other countries with these free trade agreements, though that could take months or even years.
The new Treasury rule on EVs comes from the Inflation Reduction Act, the climate and clean energy law passed by Congress last year. The rules were written in a way help move the supply chain for the critical minerals needed for things like EV batteries, solar panels and smaller rechargeable batteries away from China.
There are two major requirements that auto makers need to meet if they want their EVs to be eligible for the $7,500 tax credit: a critical mineral requirement and a battery component requirement, which are each worth $3,750.
The critical mineral requirement mandates a certain percentage of the value of the critical minerals that power EV batteries — like lithium, nickel, graphite and copper — must be extracted or processed in the United States, or a country that it has a free-trade agreement with. The minerals could have also been recycled in North America. The battery component requirement mandates that a certain percentage of the value of the battery components must be manufactured or assembled in North America.
Importantly, these requirements will ramp up over several years. For critical minerals, the percentage will start at 40% in 2023 and ramp up each year to 80% by 2027. For battery components, the percentage will start at 50% and ramp up each year to 90% by 2028.
Administration officials and experts agree the rules are incredibly complicated to implement in a very short timeframe.
“They’re just quite complex,” White House senior adviser John Podesta recently told CNN.
Twenty-one countries will have free trade agreements on critical minerals with the US: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, Singapore and Japan.
Countries including Chile and Australia are notable, as both have a vast supply of lithium and extensive mining operations. Senior administration officials said the new rule will make these countries’ lithium more competitive: Instead of going to China the minerals could go to Japan or Korea, or directly to the US. Korea, Mexico and Japan have major car assembly operations, and many of those cars end up sold in the US.
Biden has said the US is also negotiating adding the European Union to the list, and others could be added in the future.
The last few months have seen a wave of announcements from car companies that are moving their EV and battery production factories to the US and neighboring countries.
But experts and officials say the start of the critical mineral supply chain — mining and refining critical minerals — will be the most difficult aspect to change. That’s in large part because China has a tight grip on it. The US has just a few lithium mines, located in Nevada. Companies are vying to start mining lithium around California’s Salton Sea, though no commercial operations have started yet.
The Department of Energy “can give a loan to build a battery manufacturing facility,” Boylan said. “It’s a whole different ballgame from talking about permitting an open-pit lithium mine.”
by tyler | Mar 27, 2023 | cars, CNN
When EU lawmakers voted to ban the sale of new combustion engine cars in the bloc by 2035, it was a landmark victory for climate. In February, the European Parliament approved the law. All that was needed was a rubber stamp from the bloc’s political leaders.
Then Germany changed its mind.
In a reversal that stunned many EU insiders, the German government decided to push for a loophole that would allow the sale of combustion engine cars beyond the 2035 deadline — as long as they run on synthetic fuels.
It’s an exception that could put the European Union’s green credentials at risk. The bloc is legally obligated to become carbon-neutral by 2050. With cars and vans responsible for around 15% of its total greenhouse gas emissions, a phase-out of polluting vehicles is a key part of EU climate policy.
Here’s what’s at stake.
The ban on internal combustion engine cars is intended to be one of the centerpieces of the European Union’s ambitious plan to cut its emissions to net zero by 2050 — which means removing from the air at least as much planet-heating pollution as the bloc emits.
The law envisions a total ban on the sale of new diesel and gasoline cars by 2035. The European Union argues that the deadline is necessary because the average car’s lifespan is around 15 years — so to get a fleet that produces no carbon pollution by 2050, sales of combustion engine cars must end by 2035.
But earlier this month, just before the final vote, Germany pushed back on the idea that all internal combustion engines must be banned. Instead, it argued for engines powered by “green” fuels to be allowed.
Other European countries, including Italy, Poland and the Czech Republic, joined Germany in demanding the exception and after intense negotiations, the EU’s Climate Chief Frans Timmermans announced on Saturday that “an agreement with Germany on the future use of e-fuels in cars” had been reached.
While the text of the law remains unchanged, Germany says it now has the assurances it was seeking from the EU on e-fuels.
“Vehicles with combustion engines can still be newly registered after 2035 if they use only CO2-neutral fuels,” German transport minister Volker Wissing said on Twitter.
Timmermans said the EU will work now on drafting specific rules to implement the agreement.
Synthetic fuels, or e-fuels, are made using hydrogen and carbon dioxide captured from the atmosphere.
Their proponents often portray them as “clean”, but the reality is not straightforward. Burning these man-made fuels releases similar amounts of planet-heating emissions and air pollutants as using conventional fossil fuels.
The “green” credentials refer to the manufacturing process: e-fuels are made from carbon that was removed from the atmosphere, which offsets the emissions they produce.
For climate campaigners and the lawmakers who negotiated the new rules, this is not good enough.
“E-fuels emit carbon dioxide from the tailpipe,” said Dutch EU lawmaker Jan Huitema, who led in drafting the policy.
There are other problems too. For one, e-fuels are not yet produced at scale. The manufacturing process is expensive and requires a lot of renewable energy.
Supply of e-fuels is likely to be limited for some time, and critics say they should be reserved for industries that do not have a viable alternative to fossil fuels, such as aviation and shipping.
Many EU policy makers were flabbergasted by the demands from Germany and others. The legislation had been in the works for more than two years and had required many rounds of negotiations.
“I was the lead negotiator with the [European] Council on the final text, it was adopted there by the ambassadors of the different member states,” said Huitema. “You have an agreement and now, all of a sudden, a couple of member states want to refrain from the agreement. That is not how you negotiate and how you make deals with each other.”
Climate groups say the changes water down action on climate change.
Transport & Environment, a clean transport campaign group, said the loophole for e-fuels would slow down the transition to electric vehicles.
“[Germany’s] plan would derail the decarbonization of the new fleet while allowing more conventional oil to be used in the existing fleet post-2035 — a win-win for Big Oil.”
Even some carmakers came out against the potential changes to the law.
A group of dozens of companies including Volvo and Ford penned an open letter to the European Union, pushing against the exception.
“First-mover companies have already significantly invested in zero-emission vehicles and should be rewarded for taking the inherent risks to decarbonize their fleet. It would be a very negative signal to reverse the political agreement reached last year,” they said.
Germany is governed by a coalition, and it is one of the parties, the liberal FDP, that called for the changes.
“The internal combustion engine is not the problem. The fossil fuels that run it are,” Wissing, who is a member of the FDP, said on Twitter earlier this month. “The goal is climate neutrality, which is also an opportunity for new technologies. We need to be open to different solutions,” he added.
Germany is home to some of the world’s largest automakers, including BMW, Mercedes-Benz, Audi and Volkswagen, and the government has to walk a tightrope between ambitious climate policies and the interests of a powerful industry that keeps the economy humming.
Manufacturers of car components and engines, fossil fuel producers and fuel transportation companies have lobbied for the exception because it would allow them to continue using their existing infrastructure and products.
The Federation of German Industries, a lobby group, said e-fuels could make “a major contribution to achieving the adopted climate targets.”
“Since they can be used immediately without having to build a new infrastructure, they can also be implemented in economically less developed countries,” according to a statement on the group’s website.
The dispute over the legislation has caused friction within Germany’s government.
Environment Minister Steffi Lemke of the Greens, another coalition party, criticized the challenge to the law.
“Germany should remain a reliable partner to its EU partners. The new CO2 fleet regulation for passenger cars and light commercial vehicles, which Germany has supported in recent months, is a major step forward for European climate protection,” she said in a statement earlier in March.
The law is intended to be one of the world’s strongest measures to phase out gasoline vehicles.
Scientists say reducing planet-heating pollution is non-negotiable if the world is to limit global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels and avoid a key tipping point beyond which extreme flooding, droughts and wildfires will likely become much more frequent.
Despite such warnings and the pledges made in the Paris Agreement to tackle climate change, global emissions have continued to rise, barring a dip in 2020.
Some are concerned that the dispute casts doubt on the European Union’s ability to implement its ambitious climate agenda.
“This debate is really destabilizing,” said Elisa Giannelli, a senior policy advisor at E3G, a climate think-tank, noting that the European Union had been “on track for climate neutrality.”
“Backtracking on a piece of legislation is potentially really undermining the credibility of what we’ve achieved over the past years,” she said.
“It’s not just about cars. It’s about the political signals that that [dispute] sends.”
The revised law, which will allow some combustion engines that run on e-fuels to be sold beyond 2035, is expected to be approved on Tuesday.
