FRANKFURT (Bloomberg) -- Volkswagen AG is preparing to integrate flat batteries into future cars as the German manufacturer plans to boost its electric-vehicle lineup following its emissions manipulation scandal.
The company expects demand to increase rapidly as the range of battery-powered vehicles is growing and costs are declining substantially, VW brand chief Herbert Diess said according to a transcript of an interview with the internal staff newspaper Insight that was obtained by Bloomberg and will be sent to workers today.
"We are developing a special vehicle architecture that foresees the installation of flat batteries,” Diess said in a joint interview with VW’s top labor union representative Bernd Osterloh. “This will be a breakthrough for us.”
VW is grappling with the fallout of revelations that it had cheated on pollution tests with its diesel cars and as the company tries to catch up with rivals in electric cars. Software engineered to lower the level of harmful nitrogen oxides only when a car’s emissions were being evaluated had been installed in some 11 million vehicles worldwide. VW set aside 6.7 billion euros ($7.3 billion) in the third quarter for diesel recall costs, not including potential regulatory fines and damages from hundreds of lawsuits.
Deliveries of the VW namesake brand are set to decline for the first time in 11 years in 2015 as the diesel scandal hurts demand in markets including the U.S. and a weak economy in countries like Brazil and Russia is weighing on car sales. Sales fell 4.5 percent through November to 5.34 million vehicles and probably won’t surpass last year’s 6.12 million cars, the Wolfsburg, Germany, company said on Friday.
Diess said VW is also creating a new business segment called “New Volkswagen” to bundle development of digital features for connected vehicles and related mobility services as Silicon Valley firms like Apple Inc. and Alphabet Inc. plan inroads into the automotive segment.
"The automobile world is changing dramatically and new players have unbelievable resources,” Diess said. “Now it’s important to revamp and let things go to invest in other things like software development and battery production.”