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VW sets aside $7.3B war chest for diesel scandal fallout

The crisis enveloping Volkswagen AG, the world's top-selling carmaker, escalated Tuesday as the company issued a profit warning following a stunning admission that some 11 million of its diesel vehicles worldwide were fitted with software at the center of a US emissions scandal. The German company said it was setting aside around 6.5 billion euros ($7.3 billion) to cover the fallout from the scandal that has tarnished VW's reputation, raised questions over the future of CEO Martin Winterkorn and battered its share price. The reputational damage to Volkswagen is implicit in the market's response. Volkswagen's share price slid a further 16.2 percent Tuesday to a near four-year low of 112 euros. The fall comes on top of Monday's 17 percent decline. The shockwaves from the scandal enveloping Volkswagen were being felt far and wide across the sector as traders wondered who else may get embroiled. Germany's Daimler AG, the maker of Mercedes-Benz cars, was down 6.5 percent, while BMW AG fell 5.4 percent. France's Renault SA was seven percent lower. The scandal is hugely damaging to a business that relies heavily on a hard-won reputation for quality and trustworthiness. "Brands are all about trust and it takes years and years to develop. But in the space of 24 hours, Volkswagen has gone from one people could trust to one people don't know what to think of," said Nigel Currie, an independent UK-based sponsorship and branding consultant. The trigger to the company's market woes was last Friday's revelation from the US's Environmental Protection Agency that VW rigged nearly half a million cars to defeat US smog tests. The company then admitted that it intentionally installed software programmed to switch engines to a cleaner mode during official emissions testing. The software then switches off again, enabling cars to drive more powerfully on the road while emitting as much as 40 times the legal pollution limit. "We have totally screwed up." - Michael Horn "In my German words: we have totally screwed up," the head of Volkswagen's US division, Michael Horn, told an audience in New York on Monday. In its statement Tuesday, Volkswagen gave more details, admitting that there were "discrepancies" related to vehicles with Type EA 189 engines and involving some 11 million vehicles worldwide. The number of vehicles involved is more than the 10 million or so cars it sold in 2014.

VW debuts Get Happy Super Bowl ad

Brace yourself for another tidal wave of Super Bowl commercials. Volkswagen has released its spot for this year's big game. Set to air during the second quarter, the Get Happy spot follows one jubilant office worker as he makes his way through the day, spreading joy wherever he goes. The source of his happiness? A Volkswagen Beetle, of course. Now, if you're wondering why a gaggle of white guys are running around on your screen with Jamaican accents, it will help to know the spot is part of a larger Get Happy campaign featuring Jimmy Cliff.
The first ad in the series featured the artist singing his rendition of "C'Mon, Get Happy," complete with a little help from some notorious unhappy YouTube stars. You can take a look at the new ad before it airs below, along with the complete press release for a little more background.

Recharge Wrap-up: VW consumption down 24%, BAIC opens EV R&D in CA

The Biofuel Infrastructure Partnership will provide grant funding to 21 states to help improve consumers' access to renewable fuels. Tom Vilsack, Secretary of the US Department of Agriculture announced the funding, which will help retailers purchase and install the equipment necessary to dispense fuels like E85 and other higher ethanol blends. Groups such as the American Coalition for Ethanol, Growth Energy, Prime the Pump, and the Renewable Fuels Association came forward to applaud the announcement. "This assistance in building out retail infrastructure is not only good for the American farmer but it is also great for the American motorist who will now have more opportunities to buy higher octane fuel at a lower cost," says Prime the Pump Chairman Ray Defenbaugh. Read more from Domestic Fuel. Volkswagen has reduced resource consumption of its vehicle production by 24.3 percent since 2011. As part of its "Think Blue. Factory." program, the automaker has implemented a series of environmental efforts (a number VW puts at 3,400 measures) at its factories worldwide. Examples include optimizing shut-down schedules, reducing solvent emissions, energy recovery programs, and recycling paper, plastic, and water. Read more at Green Car Congress. BAIC has opened an electric vehicle research and development center in California's Silicon Valley. The Chinese automaker's first overseas R&D facility, it opened under BAIC's subsidiary, Beijing Electric Vehicle Co. (BJEV), and is affiliated with the Beijing New Engineering Research Institute. The center will be responsible for the research and development of three to four new models per year, as BJEV intends to bring a complete lineup of EVs to market. BJEV also plans to open an R&D center in Europe. Read more at Green Car Congress or from BAIC. Co-CEO of Zap and CEO of Jonway Autos, Wang "Alex" Gang is providing $10 million in funding to the two companies in order to meet electric minivan orders. Zap/Jonway have taken down payments from Dongfeng to supply 11,000 of the EVs by the Chinese New Year (February 8) of 2016. The equity investment from Wang allows Zap/Jonway to ramp up production to meet this deadline, with a target of 1,000 EVs per month by year's end. Read more in the press release below. CEO Funds $10 million To Support ZAP and Jonway Auto in Delivering 11,000 EV minivan Orders SANTA ROSA, Calif., Sept.