The ongoing Dieselgate scandal has thrown Volkswagen into an administrative, public relations, and financial crisis. But while many residents of Planet Earth seem eager to shove Volkswagen under the bus, the automaker received a vote of support from 45 entrepreneurs and investors, who asked California not to punish the German automaker.
Except, their plea comes with a very, very big catch.
A CURIOUS TURN OF EVENTS
These days, it's pretty obvious that the cars of tomorrow will rely on electricity rather than fossil fuels, but it took Volkswagen a long time to see the writing on the wall.
While many of its competitors spoke eagerly of their electrified cars, Volkswagen was busy digging in its heels, insisting that "clean diesel" was cheaper and better for the environment. The company's former Audi chief (now head of Cadillac) called the extended-range electric Chevrolet Volt "a car for idiots", and the brand put the brakes on its own electric car program for a while.
Oh, how things change.
In September, of course, we learned that Volkswagen engineers had equipped more than 11 million diesel vehicles with software designed to cheat on emissions tests. Why? Because those folks couldn't figure out how to meet strict emissions regulations here in the U.S.
Now, Volkswagen has changed its tune. It's finally, reluctantly begun to turn away from diesel and focus more energy (pun intended) on electric vehicles.
AN OPEN LETTER TO THE CALIFORNIA AIR RESOURCES BOARD
Watching Volkswagen spin out of control, you'd think electric car evangelists like Tesla CEO Elon Musk might be consumed with schadenfreude. But yesterday, Musk and 44 others signed an open letter to the chair of the California Air Resources Board, Mary Nichols, asking that Volkswagen not be required to repair diesel vehicles registered in California.
Say what? It's true, but there's a stinging catch:
"The VW emissions scandal is mainly the result of physics meeting fiction. In the simplest terms, we have reached the point of de miminis returns in extracting performance from a gallon of diesel while reducing pollutants, at least at reasonable cost. Unsurprisingly, and despite having the greatest research and development program in diesel engines, VW had to cheat to meet current European and U.S. standards. Meeting future tighter diesel standards will prove even more fruitless."
The letter goes on to argue that fixing Volkswagen diesels will be expensive and impractical. Many owners won't even bother to have their cars repaired because they know that the fix will diminish their performance.
What do Musk and Co. propose? As it turns out, they have a rather thoughtful alternative plan, which includes these four steps (emphasis ours):
1./ Release VW from its obligation to fix diesel cars already on the road in California, which represent an insignificant portion of total vehicles emissions in the State, and which cars do not, individually, present any emissions-related risk to their owners or occupants
2./ Instead, direct VW to accelerate greatly its rollout of zero emission vehicles, which by their very nature, have zero emissions and thus present zero opportunities for cheating, and also do not require any enforcement dollars to verify
3./ Require that this acceleration of the rollout of zero emissions vehicles by VW result in a 10 for 1 or greater reduction in pollutant emissions as compared to the pollution associated with the diesel fleet cheating, and achieve this over the next 5 years
4./ Require that VW invest in new manufacturing plants and/or research and development, in the amounts that they otherwise would have been fined, and do so in California to the extent that California would have been allocated its share of the fines
So, instead of fining the company, they want CARB to demand that Volkswagen invest what it might've spent on fines on developing electric vehicles instead.
We freely admit, the punishment Musk et al request from CARB is probably better than simply forcing Volkswagen to sign over a check. If CARB had the ability to craft that kind of agreement, it would likely provide far greater returns for California.
We also admit that such an agreement could be a huge boost to the electric car industry, and a direct benefit to most of those who signed the letter. As it states:
"The bottleneck to the greater availability of zero emissions vehicles is the availability of batteries. There is an urgent need to build more battery factories to increase battery supply, and this proposal would ensure that large battery plant and related investments, with their ensuing local jobs, would be made in the U.S. by VW."
Could CARB do it, though? Probably not. The letter cites a similar scandal involving diesel trucks in 1990, which was resolved not by recalls, but by accelerating regulation deadlines. CARB could do the same thing here, but forcing Volkswagen to invest money and other resources in the state? That sounds a little like indentured servitude to us.
You can find a PDF of the letter here.