The software for new Volkswagen Group electric cars came to bring the head to Herbert Diess since the problems he has already caused in his time in the Volkswagen ID.3. The unit in charge of its development, To likedirect responsibility of the former CEO of the Group, was unable to resolve the problems and forced to delay the arrival of new models from Porsche, Audi and Bentley. This situation, unsustainable for the bosses of the German group, was at the origin of the departure of Herbert Diess from his post, a clear demonstration of the change the automotive industry is undergoing.
At its meeting last Friday, the Volkswagen Group Supervisory Board appointed Oliver Blume, current Porsche Chairman, as new president of the German consortium replacing Herbert Diess. Chairman of the supervisory board, Hans Dieter Pötsch, thanked Diess for the work carried out at the head of the group and the Volkswagen brand to advance the transformation of the company, but did not specifically mention the causes of this dismissal. .
The departure of Diess as CEO is due to the successive and serious delays in the development of the software that will manage all of its electric cars, which has delayed the planned launch of new models of Porsches, Audis and Bentleys. An untenable situation given the precedents of a software whose first errors delayed the initial launch of the first electric cars of the ID family and in addition some of its customers are still suffering who must bring their vehicles to dealerships to receive updates. day due to problems. to run them via OTA (over the air).
Diess, direct manager of Cariad, the unit that develops the software, he also did not know how to make allies in the Group and became increasingly isolated under a harsh and demanding style of leadership. His efforts to turn the company into a leader in electric vehicles have repeatedly clashed with union leaders, warning that Volkswagen was far behind Tesla in many aspects, such as the productivity and efficiency of its production centers, for which it had to cut thousands of jobs. Finally, bugs in the software eroded Diess’ support for the powerful Porsche and Piech family, responsible for making the most important decisions.
In December, Volkswagen reshuffled its board of directors, stripping Diess of some responsibilities and giving him a key task: Exchange love. Although many bugs have since been fixed, Diess has not been able to make the problems go away completely. Quite the contrary.
Cariad has delayed the launch of important new models for the group, including the Electric Porsche Macan, a high-volume sports car given the brand’s plans to launch a public IPO offering in the fourth quarter of this year. The new range of electric vehicles Audi Artemis has been delayed for about two years and will not see the light of day until 2027. And it is possible that Bentleythe luxury firm of Volkswagen, cannot go all-electric by the end of this decade as expected, also due to software issues, as noted by car week earlier this month. “The Cariad takeover seems to have been Diess’ undoing,” said Matthias Schmidt, an independent German auto industry analyst.
Volkswagen’s solutions to the challenges posed by the new automotive industry reflect its status as industrial giant: He is able to invest a lot of money and a lot of manpower to solve many problems. But modernizing the business for the digital age requires attracting talent and developing skills that go beyond their traditional areas of expertise. Drivers are increasingly demanding faster, more usable and intuitive user interfaces and efficient and reliable connected services that could create new revenue streams, if done right.
“Software is the key to the future,” Tesla CEO Elon Musk tweeted when asked by one of his followers about Herbert Diess’ departure from Volkswagen. The two leaders have always shown their mutual admiration and friendship beyond the competition between their respective companies.
Diess did not lack ambition. Your last requested investment plan 89 billion euros in software and in electric vehicles in the next five years. Last year, Volkswagen announced that it would eventually create 10,000 jobs in its software development operation alone, making it one of Europe’s largest software companies. Just three weeks ago, it proposed major investment in China to employ several thousand software engineers in the world’s biggest auto market.
It was also clear what was at stake. Diess compared the new automotive industry to mobile telephony, referring to Nokia’s lack of response during the emergence of Apple’s iPhone. For him, autonomous driving, based on software and communication, would lead to an even greater transformation than the electrification of propulsion systems.
Volkswagen is now turning to the CEO of Porsche, Olivier Blume, trusting him to be more of a team player and shrewd navigator within the various factions of the group. Unlike Diess, Blume doesn’t have a huge presence on LinkedIn or Twitter, but he showed able to recognize industry trends. The former Audi intern who has been leading Porsche since 2015 has championed the development of the Taycan, the brand’s first 100% electric model, which now overtakes the 911.
Getting Volkswagen out of its quagmire won’t be easy. Schmidt said Blume needed to bring about a deeper cultural shift in Cariad to make things work. In the analyst’s opinion, “they should have looked for the best in Silicon Valley because you can’t run the software with people from the auto industry itself.”
Blume, whose appointment takes effect on September 1, will combine his new responsibility as head of the Wolfsburg-based group with chairmanship of Porsche, which is studying a possible IPO.