Can Volkswagen reinvent itself? It will be a tough slog, but I think so. In fact, the company's transformation is already underway, hiding in plain sight.

VW was always the German automaker most skeptical of electrified cars. The company actually invited journalists on EV-themed trips, and then told the assembled reporters that cars with plugs would never work (despite VW's fleet of test cars) and that diesel was the green answer.

But now, as VW's reputation and financial position hang in the balance, the company — maybe out of necessity, but also with some apparent conviction — is abandoning the diesel strategy that is caused a lot of its current woes, and it is busily electrifying the fleet.CEO Matthias Mueller made this policy explicit at the company's annual meeting, declaring that the company would "make electric cars one of Volkswagen's new hallmarks." There will be a whopping 20 new EVs by 2020.

We've already seen the Porsche Mission-E and the Audi Q6, those Tesla-chasing high-performance electrics with 2018 delivery dates. But at the current Beijing Auto Show, VW brought out a wholly new prototype vehicle. The T-Prime Concept GTE, a credible crossover with 87 miles per gallon equivalent and 31 miles of electric range, looks ready for production.

VW T-Prime Concept GTE Zero to 60 in just six seconds means a lot of people will see the back of the T-Prime Concept GTE. (Photo: Volkswagen)

Before we go into the T-Prime's many virtues, let's look at where VW is right now. The company, once touted for its environmental innovations, is in the green hot seat. Kathryn Phillips, director of the Sierra Club's California office, thinks the vaguely worded proposed settlement that emerged last week is far too lenient.

"It does not go far enough," Phillips said in a statement. "Without strict penalties, and without fixing or removing the polluting vehicles, people will continue to breathe dirtier air, consumers will lose faith in watchdog agencies and manufacturers will believe they can endanger our health without feeling the full consequence."

Phillips said any final settlement has "to fix or remove all the polluting cars still on the road, make whole the consumers who trusted the vehicles were lower polluting and compensate for the pollution the faulty cars created."

In addition to the still-fuzzy compensation plan (which does include buybacks and repairs), VW faces up to $46 billion in Environmental Protection Agency fines for the 580,000 U.S.-spec vehicles at issue. It's unlikely the EPA fine will be anything like $46 billion, but it will be substantial. U.S. District Court Judge Charles Breyer set a deadline of June 21 for filing preliminary proposals (with the details), and the public will get to comment before the settlement is finalized.

Kathryn Phillips Kathryn Phillips of the California Sierra Club unloads on VW's settlement as not going far enough. (Photo: AQMD On the Air)

And all this is just the U.S. case; the problem is far worse in Europe.

So, for many reasons, VW has to become the greenest automaker on the planet. And its public moves since the scandal broke are all in that direction. In fact, just days before the cheating was revealed, VW debuted the Mission-E and the Q6 electric cars in Frankfurt.

Assuming it still has money left for the necessary development work, VW is in a good position to become an electric car leader. Its e-Golf is already beloved in the EV community as the best affordable option. (Porsche and Audi engineering should be able to produce EVs that are fun to drive and also deliver long range and fast recharging.)

So let's look under the hood of the T-Prime, which can reach 60 mph in six seconds (and tops off at 139 mph). It's all-wheel drive, with a plug-in hybrid drivetrain that produces a whopping 375 horsepower from a 248-horsepower, two-liter turbo four-cylinder engine coupled to a 134 horsepower electric motor. A limited slip differential and an eight-speed automatic are conduits to power delivered to both the front and rear wheels.

Charging of the 14.1-kilowatt-hour lithium battery takes 2.5 hours at 7.2 kilowatts. What's most impressive about the T-Prime is that — like the Tesla Model X, which is having some teething problems — it's a full-sized SUV (hot now) with all the luxury add-ons. This kind of cake-and-eat-it-too vehicle requires little sacrifice of its presumably well-heeled clientele.

VW will produce the T-Prime, or something like it. It might have been better if VW saw the light on electric cars a little earlier, and abandoned its quixotic diesel push before the regulators came in. But we are where we are.

Here's the new VW concept car on video, with a heavy emphasis on its new styling language:

Jim Motavalli ( @jmotavalli ) writes about cars, technology and the environmental world to anyone curious enough to ask.

Can Volkswagen reinvent itself?
VW is poised to reinvent itself as an EV-friendly treehugger.