VW Shifts Gear In Drive For Electric Vehicles

VW has announced a new focus on plug-in hybrid technology as it slashes investment costs following the diesel emissions scandal.

The company, which faces a multi-billion bill to clear up the mess arising from the so-called defeat devices to cheat exhaust testing, said its diesel strategy was facing a "reorientation".

Following a meeting of the newly formed Volkswagen Brand Board of Management, it was confirmed that as part of its efforts to reduce costs, VW would shift towards electric technology in its diesel models.

It said only diesels with selective catalytic reduction (SCR) and AdBlue technology would be produced for the European and North American markets in future.

VW said its plans also included accelerating the development of a "standardised electric architecture" for passenger cars and light commercial vehicles, with the next generation of the VW Phaeton becoming an electric car only.

Taken together, the decisions, VW said, would result in annual investment savings of €1bn (£746m) annually.

These would be on top of its efficiency programme, which the company said would be accelerated.

The board's head, Herbert Diess, said: "We are very aware that we can only implement these innovations for the future of the Volkswagen brand effectively if we succeed with our efficiency programme and in giving our product range a new focus.

"Together with my board of management colleagues and the entire team we are working at top speed on these issues.

"Time and again, the Volkswagen team has proved it stands united and is fully focused on shaping the future, particularly when times are tough.

"We have now laid the further foundations for that."

VW has already set aside €6.5bn (£4.8bn) to cover the cost of the emissions scandal but the bill is expected to soar.

While it could take VW more than a year to recall and fix the 11 million vehicles affected by the diesel engine scandal worldwide, it also faces the prospect of regulatory penalties and legal action from owners of the VW, Audi, Skoda and SEAT vehicles involved.

Future sales are also at risk as a result of the backlash.