Volkswagen’s diesel scandal has already cost it tens of billions. The number is now specific: $34.69 billion, or 31.3 billion euros. That is the bill the company says it will pay in fines and settlements. The money is already provisioned for. The cash is set aside. But the real cost is not just financial.
The scandal broke in 2015. Defeat devices in millions of cars let them cheat on emissions tests. The German giant got caught. Management collapsed. Lawsuits piled up. Regulators circled. The company’s reputation took a direct hit. Now, five years later, the final tab is coming due. Chief Financial Officer Frank Witter said the company expects special effects of 2.9 billion euros in 2020 and 1.2 billion euros in 2021. A spokesman clarified those cash outflows were already provisioned for. That means the money was already accounted for. It does not mean the pain is over.
What does a company do after such a blow? It pivots. Hard. On the same day it announced the $34.69 billion figure, Volkswagen also said it is shifting to high-nickel batteries for its electric cars. Starting next year. The plan is to raise nickel content from 65% to 80%. Frank Blome, head of the company’s Center of Excellence for Battery Cells, said the move is meant to cut battery cell costs. Higher nickel means more storage capacity. More range. Lower cost per car. The company wants to produce 3 million electric vehicles by 2025. That is an aggressive target. It needs cheaper batteries to get there.
These two announcements are not separate stories. They are the same story. One is the price of failure. The other is the price of survival. Volkswagen cannot afford another dieselgate. It cannot afford to be caught flat-footed again. The regulatory environment has changed. The public trust is gone. The only way forward is to bet everything on electric.
The diesel scandal was a systemic failure. It was not just one rogue engineer or one bad decision. It was a culture that allowed cheating to become standard practice. The company paid a heavy price. But the price was not enough to kill it. Volkswagen is still the world’s largest carmaker. It still has the resources to pour billions into a new technology. The fines are a cost of doing business. The battery shift is a bet on the future.
High-nickel batteries are not a sure thing. They are more energy-dense, but they also carry risks. Nickel is expensive. It is volatile. Supply chains are not secure. And the technology is still evolving. But Volkswagen has little choice. It needs to cut costs. It needs to boost range. It needs to convince consumers that its electric cars are better than the competition. That competition is fierce. Tesla is already there. Chinese manufacturers are closing in. Legacy automakers are scrambling.
The diesel scandal forced Volkswagen to confront its own failures. The battery announcement shows it is trying to move on. But the shadow of 2015 is long. The fines are paid. The settlements are signed. The trust is not so easily rebuilt. Every electric car Volkswagen sells will carry the memory of the cheat devices. Every new battery technology will be scrutinized. The company is spending billions to change its image. It is spending billions to change its technology. Whether that is enough is an open question.
The numbers are clear. The strategy is clear. The outcome is not. Volkswagen is betting that high-nickel batteries can save it. It is betting that electric cars can erase the memory of diesel. That is a big bet. And the stakes could not be higher.
