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Volkswagen Makes Major Investment in Electric Vehicles
The German automobile2 maker3 Volkswagen has launched what it is calling the best electric car for the masses.
The Associated Press describes the car as the leading edge of a wave of new battery-powered vehicles about to hit the European auto1 market. They are the result of big investments in battery technology and new factories.
But it is not at all clear whether people are ready to buy these vehicles. Electric cars still make up less than 2 percent of the market. That is partly a result of higher costs and worries about a lack of places to refresh the batteries. It adds up to a risky4 investment for car companies.
Volkswagen’s new electric vehicle is called the ID.3. It has lots of room inside, accelerates quickly and can travel up to 550 kilometers without needing a recharge. The company believes the ID.3 will change peoples’ feelings about electric cars. Volkswagen argues that the base cost under $33,000 makes it “an electric car for everyone.”
A leading competitor, Tesla’s Model 3, starts at about $40,000 in Europe. But the company’s website notes the Model 3 can cost over $44,000, depending on additions made to the vehicle.
Volkswagen demonstrated the ID.3 earlier this week before the Frankfurt Motor Show. The company also showed off a new advertising5 design.
Both moves aim to demonstrate changes at the company since its 2015 scandal. At the time, the United States Environmental Protection Agency discovered that Volkswagen was using software to cheat on emissions6 testing. The company paid more than $33 billion in fines.
The ID.3 goes on sale in Europe next year. Volkswagen plans to launch a larger electric vehicle in the U.S. at a later date.
The company is deploying7 wide-reaching financial and manufacturing know-how8 to make a success of its electric cars. Volkswagen says it will have invested over $33 billion in this area by 2023. It has spent about $1.3 billion on a factory in eastern Germany to make the ID.3. That is the first of eight planned electric-car factories, including one in Chattanooga, Tennessee.
The company, which sold 10.8 million vehicles last year, aims for 40 percent of its sales to be electrics by 2030.
Experts warn that the industry could be stuck with slow-selling products that hurt earnings9 in a weakening international car market. Electrics were only 1.8 percent of the European market through the first six months of the year.
So far it has mainly been government rules leading the launch of electric cars, not the public. Above all, companies are working to make electric cars to meet stronger rules on carbon emissions and pollutants10, especially in the European Union, or EU, and China.
“The industry has spent billions developing its new generation of electric vehicles,” wrote Max Warburton of research company Bernstein. “But this money is being spent without convincing evidence that customers are waiting for these cars.”
The EU has new limits on emissions of carbon dioxide, or CO2, the main gas blamed for rising temperatures in Earth’s atmosphere. The limits come into effect fully11 in 2021. Cars will have to produce no more than 95 grams of CO2 per kilometer. Failure to meet these limitations means a fine for every gram of C02 over the limit per car.
Ferdinand Dudenhoeffer is with the Center for Automotive Research at the University of Duisburg-Essen in Germany. He says each electric car sold could be worth more than $11,000 in avoided fines.
China is a major market for German carmakers. It is also pushing for lower-emission vehicles. Yet the U.S. government has put less pressure on carmakers to produce electric vehicles. President Donald Trump12 and his administration have sought to ease rules on vehicle efficiency set by the Obama administration.
To date, electrics are most popular in wealthier countries, where the average person earns over $44,100 a year. In poorer countries, electrics are nowhere to be seen. Just 293 sold in Slovakia, for example, and 315 last year in Greece.
Financial incentives13 are important. In Norway, where electrics were over 30 percent of the market last year, incentives were responsible for almost $13,000 in tax breaks.
Finding a place to charge is another issue. Tesla has its own system of fast-charging stations along major roads and highways. A group of automakers including Volkswagen aims to have 400 highway charging stations by 2020.
While Volkswagen has been pushing hard for electric cars, others are going about it more slowly. Daimler has the EQC sport-utility vehicle (SUV), which shares parts with an existing traditional gasoline-powered engine. That means lower new investment spending.
BMW is launching its iX3 electric SUV and an electric Mini. BMW’s experience shows the difficulties: it was first with an all-electric car, the i3 city car in 2013. But Bernstein researchers report the company lost money on it and cancelled another kind of electric car that was meant to follow the i3.
In all, some 20 new electric cars will hit the market by 2021. If demand is lacking, carmakers may have to sell the cars to rental14 companies and other businesses. They may also require employees to take them as company cars, or offer customers cost-cutting deals, all of which would reduce profits.
I’m Dorothy Gundy.
And I’m Pete Musto.
Words in This Story
masses – n. the ordinary or common people
battery – n. a device that is placed inside a machine, such as a clock, toy, or car, to supply it with electricity
accelerate(s) – v. to gain speed
scandal – n. an incident in which people are shocked and upset because of behavior that is morally or legally wrong
emission(s) – n. something sent out or given off
convincing – v. causing someone to believe that something is true
customer(s) – n. someone who buys goods or services from a business
efficiency – n. the ability to do something or produce something without wasting materials, time, or energy
incentive(s) – n. something that convinces a person to do something or to work harder
rental – n. something that can be available for use in return for payment
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1
auto
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| n.(=automobile)(口语)汽车 | |
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automobile
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| n.汽车，机动车 | |
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maker
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| n.制造者，制造商 | |
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risky
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| adj.有风险的，冒险的 | |
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5
advertising
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| n.广告业；广告活动 a.广告的；广告业务的 | |
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emissions
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| 排放物( emission的名词复数 )； 散发物（尤指气体） | |
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7
deploying
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| （尤指军事行动）使展开( deploy的现在分词 )； 施展； 部署； 有效地利用 | |
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know-how
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| n.知识；技术；诀窍 | |
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earnings
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| n.工资收人；利润，利益，所得 | |
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pollutants
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| 污染物质（尤指工业废物）( pollutant的名词复数 ) | |
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11
fully
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| adv.完全地，全部地，彻底地；充分地 | |
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12
trump
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| n.王牌，法宝；v.打出王牌，吹喇叭 | |
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13
incentives
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| 激励某人做某事的事物( incentive的名词复数 )； 刺激； 诱因； 动机 | |
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rental
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| n.租赁，出租，出租业 | |
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