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Volkswagen’s Electric Offensive in the U.S. Just Stalled

Volkswagen Launches "electrified!" Electric Car PromotionVolkswagen Launches "electrified!" Electric Car Promotion
Will VW's latest effort to salvage its reputation in the U.S. stall too?Photograph by Adam Berry — Getty Images

Volkswagen AG’s (VLKAY) is recalling all the electric versions of its Golf compacts sold in the U.S., after the National Highway Traffic Safety Administration discovered a fault in their batteries that makes the car stall.

VW began the recall on March 15, due to “oversensitive diagnostics for the high-voltage battery management system (that) may falsely detect an electrical surge resulting in the vehicle’s electric drive motor shutting down unexpectedly.”

No deaths or injuries have so far been reported in connection with the problem.

The recall, which affects some 5,561 vehicles across the country, is the latest blow for Europe’s largest carmaker, which is trying to put the diesel emissions scandal behind it and push its green credentials with an expanded electric vehicle range. Chief executive Matthias Müller has promised to introduce 20 new electric vehicle models by the end of the decade.

News of the recall may overshadow the company’s launch last week of its new ‘BUDD-e’ electric vehicle at the New York International Auto Show, the first product to be based on its modular platform for EVs.

It wasn’t clear whether VW would extend the recall to other markets. VW spokesmen weren’t immediately able to comment.

By the end of 2015, VW had sold just under 20,000 e-Golfs worldwide, with the U.S. accounting for only a quarter of the total. Sales are growing rapidly from a low base, including in the U.S.: VW sold 4,232 e-Golf cars in the U.S. last year, up from 357 in 2014, and another 526 in the first two months of the year, according to Reuters. The recall also includes 157 unsold vehicles in dealer hands.

Although VW has lagged companies such as General Motors (GM) and Nissan Motor (NSANY) in producing pure electric vehicles, its e-Golf has been popular in countries where government subsidies have been put in place to encourage the adoption of EVs. In Norway, for example, it outsold both the Nissan Leaf and the Tesla model S last year.

VW is still in negotiations with U.S. regulators over its attempts to retrofit diesel vehicles so as to make them run within U.S. environmental limits. On Thursday, Judge Charles Breyer, presiding over a consolidated suit against the company, gave it another month to reach an agreement with the Environmental Protection Agency and California Air Resource Board. (Click here to read Fortune’s in-depth analysis of the VW diesel scandal).