Beleaguered Volkswagen announced spending cuts of $1.1 billion on Tuesday, said it plans to upgrade its diesel emissions technology and embrace electrification, but fell short of radical action that might have reassured investors nursing huge losses after the “dieselgate” scandal broke last month.
The headline-grabbing news Tuesday that VW will make an all-electric version of its flagship Phaeton sedan to compete with Tesla was probably the most disappointing. The Phaeton, brainchild of former chairman Ferdinand Piech, was not popular with investors, who saw it as a vanity project that symbolized VW’s obsession with sales and technology at the expense of profits. If VW had decided not to renew the Phaeton, that would have been a powerful message to investors that VW was acknowledging past faults and was ready to change direction. Investors must be asking, why not make the big-selling Passat sedan all-electric?
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