UPDATE TO MY OLDER POST. OPEN LETTER TO CALIFORNIA AUTHORITY ASKING ESSENTIALLY THE SAME

Volkswagen has a problem. A big one. By way of manipulation they were able to emit 40 times more poisonous emissions than they were allowed. Volkswagen misinterpreted the health impacts of their vehicles towards millions of people in the same way as Tobacco companies have done in the past. Tobacco companies are much more honest now, but lost tens of billions dollars in ‘honesty therapy’ in the process. There is no reason not to believe that this kind of billion euro therapy won’t work for Volkswagen as well. A €20 billion fine has already been mentioned, but if it proves that they used the same practices in Europe, with a significantly higher share of diesel engines, it could become quite an expensive party to clean up after.

But what will the fine change in reality? What would the benefit be for those forced to breathe in poisoned air every day? Well, nothing. So, we need to be much cleverer this time.

Instead of forcing them to pay a €20 billion fine which would disappear into an endless governmental budget, let’s push them to commit to change. Let’s push them to build and sell 1,000,000 electric vehicles over the course of the next three years.

Electric vehicles are still more expensive than ‘normal’ ones. The major reason is low production volumes. The number of vehicles for which you distribute the research costs, production setup costs, and sales and marketing costs are simply way too low. It’s a vicious cycle. Should there be more cars, the price would drop and demand would rise, but without demand nobody is willing to make a bold decision to set the production volumes of newly produced EV models to millions, rather than merely thousands.

We desperately need such a bold decision to move things forward. Nissan edged closer with 160,000 Leafs sold within the last 4 years, but it is still too far. Even the electric car poster child TESLA has produced no more than 85.000 vehicles in three years up until now, representing only 2 days production volume of VW Group.

Bold decisions are always risky and risk always translates into money. Furthermore, while a quick transition to clean transportation may be good for people, it is not good for automotive companies which still need to depreciate their huge investments from the oil era. This would turn into an even bigger money problem.

A real, strong, 1,000,000 car commitment could be the tipping point, which would start a snowball effect for whole automotive industry. We may end up with cheaper, more competitive electric vehicles, but it would destroy billions in old investments. So it’s all about the money, and it’s hard for an automotive CEO to look at it from any other perspective. But for now, at least, Volkswagen has a €20 billion reason to think about it differently.

From time to time throughout history, opportunities appear which offer new horizons. We find ourselves in just such a moment in time. Let’s utilize it and make a real change right now. Let’s push for 1,000,000.