Volkswagen of America issued false statements this week saying it would change its brand name to “Voltswagen”, to stress its commitment to electric vehicles, only to reverse course today and admit that the supposed name change was a joke.
Mark Gillies, a company spokesman, confirmed that the statement had been a pre-April Fool's Day joke after having insisted yesterday that the release was legitimate and the name change accurate. The company's false statement was distributed again today, saying the brand-name change reflected a shift to more battery-electric vehicles.
Volkswagen's intentionally fake news release, highly unusual for a major public company, coincides with its efforts to repair its image as it tries to recover from a 2015 scandal in which it cheated on government emissions tests and allowed diesel-powered vehicles to illegally pollute the air.
In that scandal, Volkswagen admitted that about 11 million diesel vehicles worldwide were fitted with the deceptive software. The software reduced nitrogen oxide emissions when the cars were placed on a test machine but allowed higher emissions and improved engine performance during normal driving. The scandal cost Volkswagen $35 billion (NZD$50 billion) in fines and civil settlements and led to the recall of millions of vehicles.
The company's fake news release, leaked on yesterday and then repeated in a mass e-mail to reporters today, resulted in articles about the name change in multiple media outlets, including The Associated Press.
In falsely announcing a name change, the company went beyond telling reporters that its news release was legitimate. Today, the company emailed to reporters a press release that quoted its CEO announcing the fake change:
“We might be changing out our K for a T, but what we aren’t changing is this brand’s commitment to making best-in-class vehicles for drivers and people everywhere,” Scott Keogh, president and CEO of Volkswagen of America, said in the release.
The fake release could land Volkswagen in trouble with US securities regulators because its stock price rose nearly five per cent today, the day the bogus statement was officially issued. Investors of late have been responding positively to news of companies increasing electric vehicle production, swelling the value of shares of Tesla as well as of some EV startups.
James Cox, who teaches corporate and securities law at Duke University, said the Securities and Exchange Commission should take action to deal with such misinformation, which can distort stock prices.
“The whole market has gone crazy,” Cox said. “We need to throw a pretty clear line in the sand, I believe, about what is permissible and what isn’t permissible.”