This is some serious BS. Ask them to produce the language in the warranty that states that you must drive the car a certain amount of miles to cover the battery - or any other warrantied component for that matter. They won't be able to, because it doesn't exist. Then demand your money back and that they warranty the battery. If they refuse, call VW and report the incident, and request a refund from them.
Crap like this makes my blood boil, it's like the old VW of the '80s, where virtually every dealership was run like absolute crap.
Totally agree! This really pisses me off, as well!
The reason the dealer denied warranty on the battery is because they make more money when not charging warranty rates. Simple as that! I am a mechanic by trade, and run a shop now, but worked in dealerships for a long time as a Tech.
In my area, a typical shop rate is around $120/ hour when customer is paying for work performed. When warranty is paying for work, that rate might go down to $70 or $90 per hour, depending on your dealer status. Plus the book time for the repair is also lower because vehicle is newer, and doesn't have rusted bolts,......etc.
This is the main reason warranty claims are denied, and consumer gets the BS line of this is not covered by warranty. The shop Service Manager makes more money for the Dealer, and in turn he makes more money on commission. This is why some Dealers cover lots on Warranty, and other dealers bow out saying, this is not covered. It's GREED! Screw the customer, and make more money than if Warranty pays, even though it IS covered under Warranty!
Fight it, and get your money back, if you can. Might be too late now, and even fighting with VWoC might not get you anywhere. I've seen car companies back the Dealer, even though the customer was right!
Good luck!