At the wheel of Volkswagen, Oliver Blume wants to “accelerate” the power transfer “if possible”

published on Thursday, September 01, 2022 at 2:34 pm

Volkswagen on Thursday handed its future over to a new boss, Oliver Blume, who aims to “go electric where possible” in a tough economic environment, after four years of tumultuous tenure by Herbert Diess.

The product of the house is broken by the mysteries of the group, the new CEO does not come to turn the table: he must continue the main lines of the strategy led by his predecessor: the transition towards electricity and connected mobility.

“The management board around Herbert Diess has done a good strategic and technological job,” admitted on Thursday that Mr. Blume before the seminar that brought together the group’s executives.

He took the head of a management board reduced from 12 to 9 members and will focus on “strategy, quality, design and the Cariad software subsidiary”, according to a press release.

The 54-year-old German added that he is keen to “rebuild team spirit” within the group.

His predecessor mainly owed his dismissal in July to recurring tensions with staff representatives and the management team, fueled by his direct and challenging style.

However, Mr. Blume reached the controls of “a difficult moment” in the life of the first manufacturer in Europe, observed Matthias Schmidt, analyst specializing in electric cars.

The context is more uncertain than ever with the war in Ukraine and the persistence of material shortages.

He will also have to lead the IPO of the Porsche subsidiary this year and solve the difficulties that have slowed the development of Volkswagen’s software, which is supposed to be the heart of the car of the future.

The electric and connected revolution includes tens of billions of euros of investment, while the group posts mixed results in the second quarter

– No “wars” –

Joining VW in 2015, until then chairman of the board of directors of Porsche, Oliver Blume is reputed to be more conciliatory than Herbert Diess.

“Blume is not a man who leads wars”, summarized for AFP Ferdinand Dudenhöffer, director of the Center Automotive Research.

In detail, the new boss can stand on the issue of synthetic fuels.

Produced from CO2 specifically in the atmosphere using electricity, they allow the use of traditional engines with very low CO2 emissions.

Herbert Diess chose to bet everything on battery-powered cars, unconvinced of the efficiency of synthetic fuels.

“We will continue the pace” of the electricity strategy and “accelerate if possible”, Oliver Blume launched to the leaders.

Non-fossil fuels are however “complementary” and have certain “advantages” especially for their transportation and compatibility with existing fuel pumps, detailed Mr. Blume in an interview.

– Homemade batteries –

If the use of synthetic fuels on a large scale is not an option, talking about it allows us to imagine the future for the combustion engine.

The delicate subject will be decided by Brussels, which is currently working on a possible ban on new non-electric individual cars from 2035.

Oliver Blume may weigh in for an extension of engines using alternative fuels.

At risk, on the contrary, not being able to develop “fully” in electricity like Tesla, the American competitor who is a pioneer, experts warn.

Another project for Mr. Blume: software, the Achilles heel that facilitated the exit from the path of the former CEO.

While Herbert Diess wanted to make a profit by doing in-house coding, his successor could rely more on suppliers.

Because “to make the software work, you need coders and not car engineers”, summarizes Mr. Schmidt.

The new boss, on the other hand, must confirm the decision to focus more on the American market to limit dependence on China.

In-house production of battery cells, a key component of electric cars, will remain at the heart of the strategy.

For six mega-factory battery projects in Europe with a capacity of 40 GWh each, and one in the United States, Volkswagen created a dedicated entity “PowerCo”, which can welcome investors outside.

“Maybe that’s the legacy of Diess, as well as pioneering electrification after the dieselgate scandal” of rigged engines, according to Mr Schmidt. It is up to his heir to bear the fruit of the legacy.

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