VW Wants In On The Federal EV Goldrush
Published on January 28th, 2021 | by Jennifer Sensiba
January 28th, 2021 by Jennifer Sensiba
In this story and this one, we covered the Biden Administration’s plan to convert the federal vehicle fleet to electric, and some of the challenges/limitations the effort will face. I’d recommend checking out those articles, especially Steve’s piece, as there’s a lot of information, but I’ll give a quick rundown here before I cover what VW is doing.
The federal government owns or leases at least 650,000 vehicles, but according to the Biden Campaign website, the plan is to work with GSA to convert most of the state, local, tribal, and even some non-profit and federal corporation fleets (like the US Postal Service). It’s an ambitious plan, but the administration also plans on installing half a million EV charging stations to support all of those vehicles. Political and legal challenges abound. Also, the administration wants to purchase US-made vehicles, to support the economy and American workers.
Herbert Diess, the chairman of the Volkswagen Group, chimed in after hearing this:
Dear @POTUS, you want to replace your fleet by #EVs. Good decision and good timing, @VWGroup is ready to deliver! We will start our e-offensive in the US. And by 2022 we will produce our #ID4 also locally in Chattanooga. https://t.co/qmD2eTBeW4
— Herbert Diess (@Herbert_Diess) January 26, 2021
Let’s put this in perspective a bit.
Diess is the head of the Volkswagen Group. Volkswagen Group includes not just VW, but also a number of other auto brands, like Porsche, Audi, Bentley, Bugatti, and Lamborghini. Volkswagen has been into EVs for years, but early models were “compliance cars,” with limited range and charging capability. More recently, though, the company has been introducing serious EVs, like the VW ID.4 and Porsche Taycan, and more are on the way.
Unfortunately, some of the upcoming EVs are not only not made in the US, but the company doesn’t plan on even selling them in the States. That would keep those models, like the ID.3, out of Biden’s plan.
People preordering the VW ID.4 today and for all of 2021 will get a German-made vehicle, but starting in 2022, the crossover will be made in the US at a plant in Chattanooga, Tennessee. Volkswagen has many offices around the country, but that’s its only manufacturing plant.
In the future, Volkswagen plans to build more electric models at the plant, including the ID Buzz, a versatile electric vehicle that looks like the old VW Microbus, which will also be available as a cargo van. There will also be a larger sedan that will probably be available stateside, among other things.
Good News & Bad News
From VW’s perspective, there’s good news and bad news here.
The bad news is that it won’t be able to supply vehicles for Biden’s initiative for at least a year. We don’t know how quickly GSA will require federal vehicle buys to be electric, but I’m assuming that it will happen soon, and likely before Volkswagen will be ready to sell an American-made EV. Tesla, Nissan, and GM are already building EVs in the US and Ford is going to be starting domestic production soon.
Federal agencies are likely to start buying from those companies first, and they might get used to ordering those models before Volkswagen has a chance to sell a single ID.4.
The good news is that the federal government isn’t going to replace all of its vehicles at once. There won’t be 640,000 federal vehicles and up to 3 million other government vehicles replaced in 2021, and probably not that many even in five years. New vehicle sales to the federal government will be a slow trickle, with the full transition to electric probably not being 100% complete even in ten years.
This will give VW time to get new models out and open new US production lines to be a decent competitor in the federal EV push.
A Good PR Move, Too
Beyond being good business, this was a good PR move by Diess. He’s trying to gain a following on Twitter like Elon Musk and relate directly to customers. By reaching out to Biden and offering to supply EVs, he’s showing that he wants to be part of the solution to climate change, among other things. While that’s probably not going to win VW any points with the far right, it’s going to show the rest of the country that VW wants to play ball with US officials.
The other benefit is that idiots like me will write about this tweet, spread the word, and help Diess get more followers. That’s not a bad thing, because he seems to be taking EVs seriously, but I have to be honest and admit that I’m playing right into his plan here.
Either way, it’s good to see that Volkswagen is not only taking EVs seriously, but is also working on being part of getting the US up to speed.
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