By Revan Aponso
The first of April is a day reserved for pranks and practical jokes amongst friends and family every year. However, Volkswagen saw the annual day of comedic relief and foolery as a chance to announce their goals of increasing their market share in the Electric Vehicle (EV) industry. On March 29, 2021, Volkswagen put out a statement announcing their plan to change the name of their U.S. operations from Volkswagen to “Voltswagen of America”. The now hypothetical name “Voltswagen” was used to emphasize the manufacturers interest in the EV market. According to the now redacted statement, the name change was part of “public declaration of the company’s future-forward investment in e-mobility”.
After days of speculation amongst the public and a stock price rise of 8% at the height of the buzz, Volkswagen took down the press release on April 1, 2021, ending widespread commotion regarding the possibility of a colossal name change. Volkswagen confirmed the intentions of the satirical press release, tweeting, “What began as an April Fool’s effort got the whole world buzzing. Turns out people are as passionate about our heritage as they are about our electric future. So whether it’s Voltswagen or Volkswagen, people talking about electric driving and our ID.4 can only be a good thing”. The tweet not so subtly hinted at the release of the Volkswagen ID. 4, the manufacturers new all-electric SUV. However, much of the general public saw the stunt as incredibly risky instead of fun.
Volkswagen’s participation in misleading marketing was extremely risky, especially given the manufacturers tumultuous history with corporate honesty and misleading the public. In 2015, Volkswagen was embroiled in a scandal where the manufacturer was caught cheating emissions tests. The manufacturer admitted to fitting 11 million diesel vehicles with deceptive software to fake emissions. The software reduced nitrogen oxide emissions during tests but would later allow for higher emissions during normal driving. Not only did the scandal end in mass vehicle recalls and a $35 billion paid in fines and civil settlements, it also greatly damaged Volkswagen’s reputation. When other companies in the past used April Fools for false marketing stunts, for example when International House of Pancakes (IHOP) announced they were changing their name to International House of Burgers (IHOB), what was first seen as a bogus business move was later seen as a harmless joke for publicity. However, Volkswagens’ already tarnished reputation made their April fools stunt riskier. Additionally, Volkswagen could run into trouble with the Securities and Exchange Commission (SEC) since the manufacturers stock price rose by over 5 percent the day the false statement was released. The announcement of Volkswagen moving entirely into the EV market may have also caused market manipulation when the share prices of companies such as Tesla and other EV startups also increased following the press release.
While “Voltswagen” will most likely remain a joke of the past, “Volkswagen’s” ambitions to gain market share in the EV market is no joke. The German manufacturer is currently going head to head with Tesla with Volkswagen taking up 13% of the plug-in car market and Tesla taking up 16% in 2020. In terms of all electric car sales, Volkswagen trails Tesla even further with only 11% of global market share compared to Teslas 23%. However, over the next decade, Volkswagen plans to unveil over 70 new electric car models and build and operate six gigafactories across Europe. By building factories, the manufacturer hopes to cut the costs of producing EV batteries while also making them more efficient than Tesla’s in order to make their EV more accessible and affordable to consumers.
While Volkswagen’s April Fools joke may not have sat well with many, the joke stands as a possibility for a new era. Over the past decade, consumers have started to switch from gas powered cars to EV’s for the promise of a lower carbon footprint and a mentality of being part of the movement to lessen climate change. Volkswagen entering this now not-so niche market symbolizes not only their desire to cater to the increasing demand for EV’s, but also their desire to seek redemption from the emissions scandal of 2015. In the end, their current strategy of expanding EV manufacturing to ease accessibility and affordability along with their longstanding name and brand as the “people’s car” puts them in a prime position to possibly overtake Tesla as a market leader. □
- Image source
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- Volkswagen. (2021, March 31). What began as an April Fool’s effort got the whole world buzzing. turns out people are as passionate about our Heritage as they are about our Electric future. So whether it’s Voltswagen Or Volkswagen, people talking about electric driving and our ID.4 can only be a good thing. pic.twitter.com/rzx8mjgxkt. Retrieved April 16, 2021, from https://twitter.com/VW/status/1377263642702458881