January 2016 U.S. sales of electric and hybrid electric vehicles and change from a year ago:
› Electrics: 2,060, down 21.3 percent
› Hybrid-electric: 11,157, down 24.8 percent
The EPA is reportedly asking Volkswagen to make electric vehicles at its Chattanooga plant, and an analyst says VW could sell new SUVs "like crazy" if it can make them using the latest fuel-efficient alternative drivetrains.
"It would help them not only financially but from an image and reputation standpoint," said Karl Brauer, senior director of insights and senior editor for Kelley Blue Book.
The German newspaper Welt am Sonntag reported the electric vehicle production request is part of the talks the automaker is having with EPA over how VW can address the diesel-cheating scandal.
The newspaper, which gave no source for the report, also said the EPA would like VW to help build a network of charging stations for electric vehicles in the United States.
VW's chief in Chattanooga told a state Senate hearing meeting last October that the ongoing plant expansion would support possible hybrid or electric vehicle production.
Christian Koch told the Senate panel meeting in the wake of the scandal that the existing factory expansion includes a new assembly platform that could support the alternative drive vehicles, but no decision had been made to produce them in Chattanooga.
VW is spending $600 million in Chattanooga to make a new midsize SUV for the U.S. market by late this year.
Plant spokesman Scott Wilson wouldn't speculate on any vehicles or drivetrains beyond the SUV it's planning to assemble.
"The current plant expansion we are undergoing is to accommodate building the midsize SUV, and those plans are on schedule," he said.
Brauer said the Chevrolet Bolt electric small car, entering production late this year, claims a range of 200 miles, which is about twice what other similar vehicles can reach.
He said if VW produced a 200-mile range electric SUV, it would "sell like crazy. SUVs are the hottest market." Also, such a vehicle would go a long way toward "moving past recent history" for VW, Brauer said.
The new vehicle assembly platform VW is building into its Chattanooga plant is much more adaptable for the automaker, he said. For example, the carmaker will be able to switch from drivetrains with pure gas, diesel, electric and even fuel cells with minimal changes to the rest of the vehicle using the new platform, the auto analyst said.
Electric vehicle sales, however, have braked since gas prices plunged. For example, in January, sales of pure EVs dropped 21.3 percent over the same month a year ago, according to KBB. Hybrid electrics fell 24.8 percent in the period, KBB reported.
Brauer said that while gas prices have affected EV sales, new vehicles such as the Bolt also are having an impact.
"It makes it harder to sell a 100-mile or less [range] vehicle," he said.
According to Bloomberg, there's precedent for a U.S. settlement with automakers going beyond repairing or replacing affected vehicles. In the 1990's, the EPA forced truck manufacturers that had cheated on emissions tests to invest $1 billion on cleaner engines, among other things.
The EPA in March 2015 updated its policy of accepting company actions as part of a settlement if they support key government objectives, such as reducing the impact of climate change, promoting innovative technology or improving children's health.
The VW diesel scandal became public on Sept. 18 when the California Air Resources Board and the EPA released a violation notice for a so-called "defeat device" on 482,000 diesel engines in the U.S. VW has admitted it installed the devices to trick regulators.
The EPA is currently in talks with VW with the aim of agreeing on a fix for nearly 600,000 diesel vehicles that emit up to 40 times legal pollution limits.
Contact Mike Pare at email@example.com or 423-757-6318.