Volkswagen Says EVs 'Key Part' of Its Future (If History Doesn't Repeat Itself)

A Volkswagen of America spokesman said Tuesday that electric, plug-in hybrid and hybrid cars would be a “key part” of the automaker’s research and development strategy after CEO Matthias Müller told 20,000 workers in Wolfsburg that it would postpone or cancel other projects that weren’t critical to sales.

“Electrification, whether full EV, PHEV, or HEV, is a key part of our strategy long term in order to meet worldwide (greenhouse gas) targets,” a Volkswagen spokesman told TTAC on Tuesday.

In 2014, Volkswagen spent $13.5 billion on research and development — more than any other company in all sectors. However, that budget could be severely restricted as the automaker prepares to pay billions for software that cheated emissions tests.

Volkswagen could be looking for ways to not repeat history, when a 1960s lawsuit from Tatra crippled development well into the 1980s.

A lawsuit by Tatra over claims that Volkswagen copied its 1936 T97 for the German automaker’s Beetle that was made two years later, which was eventually settled for 3 million German Marks in 1961, could be a roadmap for Volkswagen today. (Most sources say VW settled the suit in 1961 for 3 million Marks, however one Wikipedia entry says it was settled in 1965 for 1 million Marks.)

The blow to Volkswagen’s research budget was measurable, according to Vintage Volkswagen Club of America Historian Heinz Schneider.

Volkswagen built the Beetle well into the 1970s, well after sales lagged, “because they didn’t know anything else to build,” Schneider said. “The Tatra lawsuit didn’t leave them much to spend on research.”

Volkswagen’s first water-cooled car was the rebadged NSU K70, a car that largely failed, according to Schneider. Volkswagen purchased NSU in 1969 and sold the rebadged water-cooled car for five years. Volkswagen fitted its Passat with a water-cooled Audi engine in 1972, but Volkswagen continued to produce air-cooled cars well into the 1980s, which didn’t do the automaker any favors.

Volkswagen sales sank during the 1970s and 1980s until its Golf gained traction with more buyers, Schneider said.

“It was the Golf that really saved them,” he said.

Schneider, who said he’s written more than 1,000 stories on Volkswagen’s history, said it would be difficult for the automaker to overcome its most-recent scandal.

“They could probably be wiped out,” he said. “I don’t know if they’re going to survive this.”

(H/T to Murilee Martin who’s written extensively about VW’s malaise-era cars.)