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(LEAD)(Yonhap Interview) Volkswagen bets on EVs, keeping diesel models in lineup

Interviews 19:06 February 10, 2019

(ATTN: ADDS Hyundai's hydrogen partnership with Audi in 8th para from bottom)
By Choi Kyong-ae

VENICE, Italy, Feb. 10 (Yonhap) -- Volkswagen AG will further focus on electric vehicles to reduce carbon emissions and meet demand for less polluting cars, while keeping diesel-powered models in its lineup, a company executive said Sunday.

It may sound contradictory as the German carmaker has been hit hard by "diesel gate," in which it beat diesel emissions tests using "defeat devices" in 2015. In 2016, the company agreed to pay US$15 billion in buybacks, compensation and penalties in a mammoth settlement with U.S. authorities.

"There was a decrease in diesel sales due to the diesel scandal, especially in Europe and, well, in the U.S. What we've seen recently in Germany since with the new EU 6d diesel cars -- which are really clean diesels -- we see again an uptake in customer orders on the diesel side as well in Europe," Ralf Pfitzner, vice president of the global head of sustainability at Volkswagen Group, told Yonhap News Agency in a recent interview in Venice, Italy.

The interview took place on the sidelines of the 5th International Symposium on Sustainability under the theme of "Climate: How to Engage Society and Deploy Decarbonization," which was hosted by Alcantara, an Italian maker of the upmarket leather alternative material of the same name.

Ralf Pfitzner, vice president of the global head of sustainability at Volkswagen, answers questions in an interview with Yonhap News Agency on the sidelines of a sustainability seminar in Italy on Feb. 9, 2019. (Yonhap)

Diesel cars that comply with the new Euro 6d-temp emissions standard are regarded as so clean that they are bolstering consumer demand in Europe.

"In the long term, we will largely focus on e-mobility, and we've put significant investments. But we're going to sell internal combustion engines (ICEs), diesel engines, as well as gasoline engines," the vice president said.

In China, Volkswagen has not sold diesel cars, and in the United States, the numbers are quite low. So far Europe is the diesel engine's dominant market, he said.

Despite its commitment to making ICE cars, the company's aggressive drive for all-electric vehicles seems to show how it plans to move forward and stay in line with its broad decarbonization efforts.

"We expect to see a fast ramp-up of e-mobility in the near future. And that's why we also had a plan that we allocate 30 billion euros (about US$38 trillion) of investment for the next five years into electrical mobility," Pfitzner said, adding that the company will have roughly 50 new models -- battery electric vehicles and plug-in hybrids -- by 2025.

Volkswagen is now converting some of its manufacturing plants in its home turf Germany and in China and other European countries to full electric plants. On this platform, it aims to produce up to 15 million cars by 2025. It sold 10.8 million cars last year.

On the road to mobility, however, there still remain things to be tackled to promote the spread of zero-emission cars, most notably charging infrastructure.

"Since there are constraints, we together with other car manufacturers are right now investing in Europe in the fast charging network along motorways. It's called Ionity," the German said.

Ionity will build up to 400 fast charging stations across Europe within the next few years. The current number of stations is quite low, probably 10 percent of the planned total, but there's a strong production plan until 2020 or 2021, he said.

Asked if Volkswagen has an interest in hydrogen fuel-cell electric cars, he said hydrogen is also an option for the future and that, within the auto group, Audi is in the lead to deal with hydrogen cars. Audi is the luxury brand under the world's biggest carmaker by sales.

In June last year, Audi joined forces with Hyundai Motor Group to cooperate in developing hydrogen car technologies.

Hyundai, the world's fifth-biggest carmaker by sales, has been at the forefront of promoting hydrogen vehicles in the past few years.

In its hydrogen road map released in December, Hyundai, the maker of the Nexo, said it and its suppliers will collectively invest 7.6 trillion won in hydrogen fuel cell electric car-producing facilities and related R&D activities by 2030.

"I believe the hydrogen car is an option for light commercial vehicles, probably also in the truck area. For passenger cars, it could be as well. Or let's say, there will be a competition among technologies, and we also have this technology in our portfolio. It's important to have a broad portfolio," he stressed.

His view was echoed in another interview by Hermann Pengg, who oversees Audi's biofuels research.

Electric and hydrogen are both options for Audi and Volkswagen, though their main focus is electric now amid climate change concerns. They also are developing hydrogen cars, and there will be cars on the market in the coming years, Pengg said.

Last year, Audi joined hands with a French biotech company to find solutions to prove large-scale biofuel production won't worsen deforestation nor use food or animal feeds to avoid criticism that they are driving up prices and starving the poor.

"Maybe the electric cars will not win because of sustainability only," Pengg said. "As we don't know, we want to go for all the options until we know (which will win). The main thing is we don't wait to decarbonize."

Hermann Pengg, who oversees Audi's biofuels research, smiles in a hall at Venice International University, the venue for the 5th International Symposium on Sustainability under the theme of "Climate: How to Engage Society and Deploy Decarbonization," before a group interview with South Korean reporters on Feb. 9, 2019. (Yonhap)


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