Volkswagen hybrids finally on the way? Why brand says Australian fuel upgrade could accelerate EV plans but labels Victorian taxes 'insanity'

Volkswagen has expressed excitement about this week’s announcement by the federal government that it intends to upgrade Australia’s remaining two fuel refineries to produce higher-quality fuels as this “opens the door” for its expansive range of internationally available “real hybrids.”

Speaking to CarsGuide at the launch of the facelifted Tiguan range (of which there is an eHybrid plug-in available overseas), the brand explained that it was cautiously watching developments that should come from the Morrison government’s announcement, but that it could mean its range will include hybrid models relatively soon.

“It opens the door, but there’s a delay on these kinds of things. We’re working on a three-year model cycle. It’s certainly a possibility for the [next round of] updates,” explained VW product and services manager Jeff Shafer.

“It ups the chances for the adoption of EVs, too, because Volkswagen [in Germany] looks at overall emissions.”

VW in Germany looks at overall emissions when considering localising models to its export markets.

VW communications manager Paul Pottinger elaborated, explaining “HQ looks at our line-up and says, ‘Well, you don’t even have hybrids yet. What’s the point in having EVs if you can’t bring down your overall emissions footprint.’ Now that we have the opportunity to bring in our range of real hybrids, they are more likely to help us localise EV models.”

As Volkswagen’s range is rapidly moving to electrification, Mr Pottinger was asked whether the brand was considering dumping popular nameplates in the near future, as many of its plug-in hybrid and updated small-capacity turbocharged engines are incompatible with Australia’s currently low-quality high-sulphur fuel.

“It would have come to that, that’s the reality we were looking at. When we went out with that messaging ‘Australia will become a third-world dumping ground’ for old engines, we did it out of dire necessity to still sell cars in this country,” he said.

“Even now we’re looking at our [plug-in hybrids] being taxed twice in Victoria. Anyone who buys one won’t just not be exempt from the fuel excise or road taxes, they will now have to pay per kilometre to drive a cleaner vehicle. It’s just insanity.”

Pottinger said the idea of plug-in hybrids being taxed twice in Victoria is "insanity"

VW’s representatives wouldn’t be drawn on which mainstream models it was in a hurry to electrify, but says it sees opportunity for both mild-hybrid and plug-in hybrid types from its international catalogue, despite relatively low sales in Australia so far and the incoming Victorian double-tax situation.

If we were to bet, though, we’d be surprised if the brand wasn’t keen to introduce the plug-in hybrid Golf 8 (in either eHybrid or GTE forms) that will be skipped for its Australian launch, a plug-in hybrid variant of its Passat mid-size sedan and wagon which is hugely popular with business fleets in Europe, and the just-launched PHEV version of its key Tiguan mid-size SUV. As all three have recently received an update for Australia, it fits with the brand’s three-to-four-year model cycle to introduce PHEV variants in the next update or full model refresh.

These developments come after years of Volkswagen saying it would be forced to skip its plug-in hybrid range, and instead shift directly from combustion technology to pure EV, with its first fully electric models not due until 2023.

VW said there was now potential for plug-in hybrid models to be introduced in Australia for the next round of facelifts or model replacements.

The government’s touted refinery upgrades are not set to come into force until 2024. If this window is missed for whatever reason, the next opportunity for Australia to reassess its fuel situation is not until 2027.