The recent announcement from car manufacturer Volkswagen that they will vacate all forms of motorsport using the combustion engine sends a direct signal of where the company is heading. This goes hand-in-hand with the previous announcement that in the year 2026 ‘will be the last product start on a combustion engine platform (for road cars).’
These two announcements seem to be in the wake of a damaging-diesel emissions cheating scandal that erupted in 2015. The result of this saw the car manufacturer paying more than 27 billion Euros in fines for hiding excessive pollution.
The emphasis will now be on fully electric racing cars and it will be ‘farewell to factory-backed commitments using internal combustion engines.’ It’s a done deal and the future direction is set!
Does anyone else think that they may be making a strategic blunder? For me, until we come up with new technology to replace the current fleet of aircraft flying the skies, container ships moving through the oceans and heavy trucks shipping goods throughout the land, fossil fuels will be about for many decades to come.
In business, future direction, objectives and vision need to be set early. This allows a strategy to be set in order to obtain these objectives and this is what VW have done. And they have declared it to the world loud and clear.
My money is on this being a wrong direction and strategy for the future. If I had shares in VW I’d be ringing my broker with an instruction to sell.
This is a bold decision by the German manufacturer which appears to be dependent on technology that either hasn’t been discovered or that VW have confidence to use to obtain their future electric objectives. At this stage while VW talk about using mHEV (mild hybrid system) coupled with a current combustion engine, there appears to be no talk of hybrid technology being utilised in the future. They have stated that 2026 will be the last undertaking of a new combustion platform.
Then there is the debate on whether electric racing can be defined as motor racing as we know and love. Don’t get me started!
My money is on hybrid technology for the sustainable future until the next generation of technology is discovered and brought to the market. Until then the ‘sell’ notice is out.