Watch CBSN Live

VW Goes Electric, But With an Eye on the U.S. Bottom Line

SANTA MONICA, CALIFORNIA -- What alternative-fuel technology comes to mind when the name Volkswagen comes up? Diesel, right? Well, VW is getting heavily involved in electrics, with plug-in battery versions of both the Golf (2014) and the tiny not-seen-in America Up! (2013). VW is not completely convinced that batteries are the way to go, but it's clearly seen that the market is going that way. And its first priority is reversing years of North American losses.

In Santa Monica, just before the Los Angeles Auto Show, incoming VW America CEO Jonathan Browning (Stefan Jacoby's replacement) unveiled the next generation EOS hardtop convertible for 2012 with Gossip Girls star Jessica Szohr in attendance, and gave journalists rides in a prototype of the Golf blue-e-motion three years before it will actually be on the market. But, he said, a test fleet is coming to the U.S. as early as next year.

"My task is to move the business to the next level with ambitious targets," Browning said. "I'm sure we'll fulfill them." He said that VW has invested $4 billion in the U.S. market, which includes the opening of a huge factory in Chattanooga. "We're betting heavily on the U.S. market," he said, "with models specifically tailored to American needs."

The new Jetta seems to be talking to American buyers -- it's setting sales records, Browning said. The EOS (with both gasoline and diesel versions and a top that drops in 25 seconds) is certainly youth- and California-friendly, which explains the Gossip Girls star and an ad campaign certain to feature a surfboard or two.

The electric Golf is a work in progress. It performed well in a quick run around Santa Monica, but Doug Skorupski, a Volkswagen technical strategist, said that four design teams are working on the e-Golf and that it is definitely a work in progress. The version we sampled had 93-mile-range and 26.5 kilowatt-hour Sanyo lithium-ion batteries. The production car will be based, unlike the prototype, on the next-generation Golf platform (one reason for the delay in getting it to the market).

According to Skorupski, VW will field a fleet of 300 to 400 electric Golfs in global test fleets for 2011 and 2012, followed by the production car. My guess is that the test fleets will be here in California.

Browning clearly has more than electric test cars on his mind. EVs are unlikely to be a profit center anytime soon, and the incoming chief has set an ambitious goal of tripling U.S. sales by 2018. The company has lost money in North America for seven straight years, and 2010 will likely make an eighth. "We've underperformed as an organization over a period of time," he told reporters in Washington in September. "There is a clear commitment to fix that. There's a plan in place."


Photo: Jim Motavalli