The Volkswagen Scandal saga continues with a new rumor that the Environmental Protection Agency may require Volkswagen to manufacture electric vehicles in the United States.
Doing so would initially prove costly for Volkswagen whose EV manufacturing is currently based in Europe. Nonetheless, VW’s Chattanooga plant presents a good opportunity for EV production expansion, as the plant is LEED Platinum certified and abuts a “giant solar field” which generates substantial clean energy.
Even from a business perspective, despite the initial fixed cost of transitioning the Chattanooga plant to EV production, it would be a smart move for Volkswagen. Since the onset of the scandal, the company’s image/reputation has become tainted with deception, harm to public health, sluggish response, and general unsavoriness.
A new, significant investment in EV production (an uncommonly significant instance of corporate social responsibility) would likely mitigate at least some of this reputational damage – if not immediately, then perhaps in the long-run. If VW wants to salvage its worth in the eyes of consumers, regulators, and the general human population, it would be wise of the company to comply with if not outright encourage the EPA’s rumored idea. And, if it is just a rumor, VW should still pursue the change: making the Chattanooga plant an EV production hub would benefit everyone, including VW.