Volkswagen's Great Escape

Can the Germangiant atone for its diesel scam by becoming the electric car maker of the future?

- Matthew Campbell, Christoph Rauwald, and Chris Reiter

As the world’s largest automaker, Volkswagen in some ways better resembles an army or a country than a mere corporation. Its flagship factory in Wolfsburg, Germany—a city built from scratch by the Nazis for the express purpose of manufacturing vast numbers of automobiles—spreads over an expanse the size of Monaco and produces more than 3,000 vehicles every day. It is electrified by not one but two Volkswagen coal plants. It is fed by a 3,400-person Volkswagen catering brigade and a sausage- making operation so comprehensive it sells to supermarkets. Here and at more than 100 other factories worldwide, the company’s 12 brands make 355 models in millions of color and trim combinations, employing more than 600,000 people who generate $284 billion in annual revenue.

It’s hard to imagine that such a robust corporate edifice could ever be at risk of collapse, as it was less than three years ago, when Volkswagen AG was consumed by one of the largest scandals in automotive history. The revelation of a systematic effort to cheat on emissions tests—employees wrote software that made diesel cars appear cleaner than they were—brought the company to its knees, ended the career of its longstanding chief executive officer, and shattered a 70-year reputation for engineering-led competence. For a time it looked like Volkswagen might not survive, at least not recognizably, a prospect so alarming in Germany that Chancellor Angela Merkel stepped in to do damage control for what is arguably the country’s most important industrial giant.