The repercussions of the alleged “diesel dupe” from last September are still evident in the global market economy, now that information is revealing just how short Volkswagen fell of its promised objectives from last autumn to completely repair all of its vehicles affected by the emissions scandal. As new specifics reveal the depth of the scandal, it is difficult to anticipate a way for the company to make a full recovery in either its U.S. or European markets. However, by utilizing the shift in marketing approaches outlined in its recently released “Strategy 2025,” the company has the potential to transform its brand capital and write a new chapter in its corporate history. Volkswagen can potentially exfoliate its tainted reputation by calling attention away from diesel and emissions altogether and embrace its marketing of electric cars instead, thus redefining its company’s mission statement entirely.

The high costs that have stemmed from both legal compensation and falling sales revenue have crippled Volkswagen’s market brand. As of last August, the German corporation reported as much as a 56 percent drop in post-tax profit. Exposed in September of last year, the German auto-making company exploited software modules, referred to as “defeat devices,” to manipulate the results of a diesel vehicle’s emissions test. The modules would display a vehicle as operating within the legal limits of the United States Environmental Protection Agency’s (EPA) guidelines when in reality it was emitting as much as 10 to 40 times the approved amount. Government agencies were prompted to pursue an investigation after the EPA began to question the results produced by Volkswagen’s emissions tests. Once exposed, Volkswagen issued statements admitting to the manipulation of the engines of over 11 million vehicles, 600,000 of which were sold in the U.S.

“We’ve totally screwed up,” said Volkswagen President and CEO Michael Horn in response to the scandal’s exposure. “Our company was dishonest.”

In the wake of the exposé, Volkswagen diesel owners have faced a median of a $1,500 decrease in the resale value of their cars. To offset this, consumers can bring their cars into a Volkswagen dealership to have the emissions deficiency corrected. However, this leads to a sharp drop in fuel efficiency, an asset that had been promised in return for a higher price of a diesel vehicle. The Federal Trade Commission ordered Volkswagen to begin a mass-recall of all of its EA189 diesel engine vehicles built between 2009 and 2015. The company also agreed to receive all affected vehicles and repair them free of charge in a year’s time, as stated by Volkswagen UK’s managing director, Paul Willis. However, the year deadline has been exceeded and the German automaker has yet to attain even 10% of their alleged goals. Fewer than 110,000 affected vehicles have undergone remedial action.

Volkswagen’s failure to comply with its promises was deemed “simply unacceptable” by the UK’s Labour MP and chair of the Transport Select Committee, Louise Ellman: “One year on from the Volkswagen emissions scandal, nine out of 10 drivers are still waiting for their car to be recalled. Time and time again, Volkswagen’s schedule has slipped… People deserve to know when they can expect their vehicles to be corrected and returned to them. It’s time Volkswagen came clean with its customers. If it refuses to do so, the government must act.”

A statement made in June claimed that the automaker had been ordered to buy back or fix affected vehicles by December of 2018 and fork over nearly $15 billion to settle U.S. claims. Consumers can also expect to receive between $12,500 and $44,000 for Jettas and Audis respectively, as promised by the Federal Trade Commission. However, Volkswagen’s greatest threat to recovery is located on the opposite side of the Atlantic, where European consumers are frustrated that the same compensation has not been guaranteed to them.

“One year [later] and Volkswagen customers in the UK will be questioning why US consumers are getting compensation while nothing is on the able for the 1.2 million owners affected in this country,” stated Alex Neill, director of policy and campaigns at a UK consumer group. “The Government has had a year to address this issue, they now need to urgently ensure that UK customers are treated fairly.”

The company’s argument states that UK consumers have no need to be compensated, as repairing their cars will not negatively affect the performance of their vehicles. However, the Department for Transport spokesman stressed that the government is continuing to push for Volkswagen to take action to protect and compensate their customers in the UK. Volkswagen has claimed that the majority of European consumers can expect to have their cars repaired by the end of this year, but that quite a few will have to continue to wait until mid-2017.

Manfred Bort, Volkswagen’s European manager, stated to their consumers that the company will “inform all affected customers in Germany by the end of the year that the technical solution is available.”

What else is at stake for the car-making company? In the past year, Volkswagen has faced a drastic shift in leadership. As a consequence of the scandal, many of the upper level executives faced suspension and expulsion, including the chief of engine development, the head of American operations, their control executive and several other high-ranking employees. The company has also been hit by a crippling drop in sales revenue and stock prices — not to mention the money spent to combat legal challenges. In 2015 alone, Volkswagen lost as much as $18 million, while class action lawsuits continue to plague the German manufacturer’s funds as they navigate these murky waters.

However, an opportunity to turn around the fate of the company has been presented in Strategy 2025. This marketing strategy outlines the details of the company’s divisional financial targets and its goals to reform and improve upon their fatal flaw. Among the list of topics that covered, the report addressed potentially merging with other component-making companies. Since Volkswagen makes almost all of its parts, it faces more cost-cutting pressures. However, by taking part in joint-unions with other companies, Volkswagen can share the burden of part-making and realign its business apparatuses.

CEO Matthias Müller stated in a comment regarding Strategy 2025 that “the Volkswagen Group will be more focused, efficient, innovative, customer-driven and sustainable — and systematically geared to generating profitable growth.”

To alleviate some of the sting from the diesel disaster, the company’s basic SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) has shown that it can transform its core business by rallying behind the distribution of their electric cars. The electric car market has grown by 13 percent since last August alone. By keeping up with the rapidly growing trends of today’s most attractive market segment (electric cars) Volkswagen can tap into an entirely different stream of sales revenue while shifting the focus away from their diesel line and consequently the emissions scandal. By changing their targeting and positioning strategy, Volkswagen can capitalize on their 3.5 percent market share of electric car sales, chasing down leading competitors (Chevy and Tesla) and using those profits to counteract the debt from the scandal’s legal compensation procedures.

RBC’s most recent survey of consumer perceptions found that favorable views of Volkswagen have dropped by 33 percent since May, but most related that in context to diesel vehicles. If Volkswagen can successfully detract away from this image by exploiting their electric car sales, they can foster the loyal customer satisfaction they still have and take advantage of the relatively low drop in customer satisfaction.

Strategy 2025 also detailed that the company will be streamlining its international relations by investing in more associations with the Asian market and its development of the self-driving vehicle. This could improve Volkswagen’s strategy to get back on track in two ways: it will allow the company to expand from its currently problematic relationship with the European market while also rallying behind a state-of-the-art product that holds great potential to transform the future of auto-making.

“We’re working to make things right,” stated President and CEO of Volkswagen, Michael Horn, in over 30 newspapers across the US. “We sincerely hope you see this as a first step toward restoring your invaluable trust.”

It is critical that Volkswagen utilizes its potential marketing opportunities while concurrently reconstructing its reputation, as it would not only provide more sources to recover their losses but also prove to the public that the company is still holding strong. A year has passed and Volkswagen has fallen short on its recovery goals, but by focusing their energy on the future of their market, the German automaker can work towards transforming its culture and establishing preventative measures to prevent future scandals.

Roughly two months ago, the U.S. Environmental Protection Agency (EPA) accused Volkswagen of deliberately using special software to cheat emissions tests.

According to Cynthia Giles of the EPA, since 2009, special software had been installed in over 11 million Volkswagen diesel-powered cars to pass emissions testing and to maintain the illusion that the diesel-powered vehicles were more environmentally safe than they truly were.  Chris Ziegler of The Verge reported the company’s diesel engines were performing so poorly on emissions tests that Volkswagen engineers employed special devices to efficaciously champion the appeal of diesel.  Ziegler described the devices as working by “only turning on emissions control when undergoing emissions testing, but not when the car is actually being driven normally and pollution is at its peak.”  According to Aaron Morrison of International Business Times, the defeat devices in the diesel cars enabled the vehicles to release from 10 to 40 times more nitrogen oxides than permitted by U.S. environmental regulations.

Volkswagen has already seen out its CEO, Martin Winkertorn, and while the scandal will have devastating effects for the company itself, the scandal will have massive repercussions for Europe and the automobile industry as a whole.

The once-lucrative Germany car company now faces catastrophic financial troubles.  Volkswagen may have to pay fines of up to $18 billion, with civil penalties accumulating to roughly $37,500 on each vehicle, according to Timothy Gardner of Reuters.  Roughly a week after the emissions scandal surfaced, the market value of Volkswagen dropped 30 percent, Rocky Newman of Fortune Insider reported. Newman concludes that the accumulation of fines will put a “conservative estimate of the cost to Volkswagen and its shareholders in the vicinity of at least $54 billion, given fines outside the U.S. and lost sales that result from the scandal.”

The financial burden may not be limited to Volkswagen.  The revelation of Volkswagen’s use of special software to beat emissions tests will likely prompt stricter oversight of all automakers and emissions testing processes.  Greg Archer, a former UK government adviser, claims there is “lots of anecdotal evidence about the use of defeat devices to disguise environmental impacts and that the scandal could spread beyond diesel and into Europe, where tests are more prone to abuse.”  Evidently, Volkswagen may be representative of a larger problem within the automaker industry and emissions testing.

The implications of Volkswagen’s emissions scandal will extend beyond the confines of the company.  Germany and Europe as a whole will undoubtedly be affected by the crisis; the scandal’s far-reaching effects can be explained by the mere size and reach of Volkswagen.  The automaker employs over a quarter million Germans alone.  According to Kevin Roose of Fusion, Volkswagen cars “account for one of every ten passenger vehicles in the world.”  In addition, Germany has the largest economy of any European country, and relies heavily on exports with approximately 45 percent of the country’s total gross domestic product coming from exports.  Given the EPA’s fine that could amount to over 18 billion, Volkswagen will undoubtedly have to make employment and salary cuts that will heavily damage the export-based Germany economy.

Prior to Volkswagen’s scandal, diesel engines had been increasing in popularity in both the United States and Europe.  After all, many of diesel’s benefits over gasoline are indisputable:  according to Allen Schaeffer, director of the Diesel Technology Forum, diesel has on average “30 percent greater energy efficiency than a comparable gasoline engine.”  Volkswagen had been persistently advertising the notion of clean diesel in the United States with notable success.  During the first half of 2015, Volkswagen overtook reigning sales leader Toyota as the sales leader for diesel vehicles.  EPA’s revelation in early September will likely halt the automaker’s progress, however.

Opinions regarding diesel vehicles have already reversed following the scandal.  According to US News, “Major European cities such as Paris and Birmingham are already calling for a crackdown on diesel and the FT has suggested that Europe, where 53 percent of 2014 engines sold used diesel, might switch “virtually overnight” to petrol.” As Leonid Bershidsky of the Bloomberg View explains, “diesel-powered vehicles popularized as a result of lower excise taxes on diesel than gasoline throughout most of Europe, and relatively loose environmental standards for diesel engines that permitted higher levels of nitrogen oxides and other unsafe particles.”

Many drawbacks of diesel fuel that were previously overlooked have come to light as a result of VW’s emissions testing scandal.  Diesel fuel is noticeably more expensive than gasoline; according to Alex Davies of Wired, the price of diesel in September was $2.501 per gallon compared to the national average of $2.289 per gallon for regular gas.  In addition, Davies claims that diesel “cars are typically several thousand dollars more expensive than the equivalent model with a gas engine, because scrubbing the exhaust gas of nitrogen oxide and other particulates takes know-how and hardware.

Now, buyers of Volkswagen diesel-powered vehicles will pay:  According to Newman, “VW owners of “clean diesel” vehicles will incur lost resale value as high as $5,000 per vehicle.”

Volkswagen’s emission scandal has and will continue to weaken support for the diesel industry.  Diesel sales were in excess of 2.4 million in 2013 for Volkswagen, accounting for a quarter of the company’s factory output, according to U.S. News.  In addition, the company had nearly twice as many diesel-powered vehicle sales as its closest competitors.  Bershidsky asserts that the scandal is “the result of Europe backing the wrong emissions-reducing technology on a regulatory level.”  The Volkswagen scandal has undoubtedly put a dent in the diesel engine industry and will prove to difficult to reverse.  As Bershidsky alleges, “There will be only two paths for them to take: making sure the emissions performance of all new diesel cars is irreproachable—which isn’t easy in the real world—or shifting production toward hybrid and electric vehicles, as Japanese companies did when they decided diesel was on its way out.” Evidently, the Volkswagen scandal may carve the way for the rise of hybrid and electric vehicles around the world; only time will tell.

Volkswagen’s emissions scandal has reverberated all over the globe.  The revelation of Volkswagen’s use of defeat device has negatively impacted not only the German economy but the European economy altogether.  In addition, the emissions-cheating scandal has devastated the company itself and will call for increasingly intense regulatory oversight on all major car companies.  Most importantly, Volkswagen’s crisis has given the hybrid and electric car industry the opportunity to rise to prominence.  Although the German-based car company with survive, Volkswagen’s scandal and the EPA’s catastrophic fine in its own should serve as noteworthy lessons to automakers around the world: Companies ultimately pay the price for their wrongdoings and should never test the boundaries of regulatory oversight.