(Bloomberg) — Volkswagen AG will launch a pilot project for climate-neutral mobility on the Greek island of Astypalea, in the eastern Aegean sea, as part of the German automaker’s efforts to roll out electric vehicles and reduce emissions.
Car- and ride-sharing offerings will help reduce traffic, and vehicles on the island will switch to electric powertrains that will recharge mostly with locally produced renewable energy, VW said Wednesday in a statement.
“Our long-term goal is climate-neutral mobility for everyone,” VW Chief Executive Officer Herbert Diess said in the statement. The six-year project will help to determine “how this vision can be reached today already.”
The world’s best-selling automaker is in the midst of a 33 billion-euro ($38.6 billion) push over five years to develop the industry’s biggest lineup of purely battery-powered cars, which will be flanked by numerous hybrid vehicles. Tapping renewable energy sources such as solar power is critical to maximizing environmental benefits, since using coal power to recharge limits emission-reduction efforts.
VW said in February it was exploring options for an electric-vehicle project in Greece after the country’s foreign ministry mentioned company officials had visited Kavala and Thassos to sound out options for mobility projects designed for small islands.
The carmaker will replace about 1,500 combustion-engine vehicles with 1,000 electric models in Astypalea, including the new ID.3 and ID.4, as well as e-scooters from the group’s Spanish brand Seat and electric bikes. Police vehicles and cars for other local authorities will be electrified as well.
Greece needs investment boosts to mitigate the impact of a decade-long debt crisis that led to a drop of around 25% of economic output. The economy is set to shrink more than 8% this year due to the pandemic. While unemployment is expected to fall to 18.6% from the crisis peak of nearly 30%, the rate remains the highest in Europe.
The Astypalea project is in line with the Greek government’s climate agenda to shift into green energy sources. The government also wants to signal that it can attract foreign investments from the likes of VW and Microsoft Corp. even during the pandemic.