Volkswagen Canada will roll out its new battery-powered ID4 compact crossover next summer as it looks to turn the page on its five-year-old diesel-emissions-cheating scandal.
“It’s about a real transformation for our company,” VW Canada CEO Pierre Boutin said on the Sept. 25 edition of Automotive News Canada’s weekly podcast, Canada Conversations.
“Based on our history, the pressure has been on [Volkswagen] for many years. ...
“It’s not just about getting through this but about really building a much stronger future for our company, for our partners, for the consumers and for society in general.”
In the yearslong aftermath of the scandal that began in 2015, the Germany-based automaker was forced to pay billions of dollars in fines and restitution to customers for installing software that falsely made it appear its engines were compliant with emissions standards.
The scandal tarnished the automaker’s reputation and also led to the resignation of top executives as well as imprisonment of some employees.
It has cast a long shadow. A Canadian judge in January approved a $196.5 million fine against the automaker after it pleaded guilty to 60 charges stemming from the scandal.
MARKET SHARE REBOUND
But the company appears to be recovering, with sales and market share globally, including in Canada, on the upswing. According to the Automotive News Data Centre in Detroit, VW Canada’s market share stood at 3.6 per cent in 2019. It was 3.7 per cent in 2015 and dropped to 3.1 per cent in the wake of the scandal.
Chris Leavens, dealer principal of Leavens Volkswagen in London, Ont., said he was confident that the days of the scandal are “long behind” the automaker.
“It was a very disappointing time for us as dealers and as a brand. Mistakes were made and I think we’ve paid the price for that and compensated people properly.
“Now it’s a good business and a great brand and we’re standing behind the biggest car company in the world. They have the power to make the change to electrification, and they’re going to do it.”
The ID4 will be one of the first vehicles stemming from the company’s 11-billion euro ($17.1-billion) investment in electrification. The VW Group aims to assemble 1.5 million EVs worldwide by 2025 — with 50 fully electric models — and to achieve carbon neutrality by 2050.
‘NEED TO WORK HARDER’
VW hopes the launch of the ID4, as well as a growing range of other crossovers powered by gasoline, will help the brand make further gains in Canada.
“We need to increase our sustainability in the marketplace in Canada,” Boutin said. “We need to attract more consumers to our brand. We need to work harder at improving our brand equity.”
The ID4 will have an estimated 400 kilometres of range and will have a 201-horsepower motor driving the rear axle. Canadian pricing has not been announced, though it will start at US $41,190 ($54,600) in the United States, including shipping but excluding federal and state EV incentives.
Boutin said 30-40 VW Canada dealers will sell the ID4 in 2021, with inventory mostly being concentrated in Quebec and British Columbia. Those are Canada’s largest EV markets and the only provinces to offer incentives for electric cars. There is a federal incentive of up to $5,000 per vehicle.
Volume will be limited in 2021 while the ID4 is built at a single plant in Germany. VW expects inventory to grow beginning with North American production in Tennessee in 2022. About 100 dealers would sell the crossover that year, Boutin said, with all 143 dealers on board in 2023. “What we want to avoid for our dealer network is
to ask them to make investments and then wait one, two or three years until their market is ready.”
Leavens said it will likely take time before EV sales volume is strong in London (400,000 population). Still, the brand has an opportunity to sell to early adopters in any market and to demonstrate in the coming years that its EV batteries are reliable and that electric car residual values — usually lower than those of internal-combustion vehicles — can stay high.
“Everybody’s excited about it,” Leavens said, “but it’s going to take some time for market acceptance.”