Volkswagen on Thursday entrusted its future to a new boss, Oliver Blume, which is important “accelerate to electric if possible” in a difficult economic environment, after the turbulent four years of the mandate of Herbert Diess. Volkswagen AG’s new boss Oliver Blum will focus “the strategy, quality, design and subsidiary of Cariad software”.
Home products broken in the mysteries of the group, the new CEO did not come to topple the table: he must continue the main lines of strategy led by his predecessor: the transition towards electric and connected mobility.
“The management board around Herbert Diess has done a great strategic and technological job”, Oliver Blume was recognized on Thursday ahead of a seminar bringing together group executives. He heads a management board that has been reduced from 12 to 9 members and will focus “the strategy, quality, design and subsidiary of Cariad software”according to a press release.
Restore the trust of the team
The 54-year-old German added that he will be enthusiastic “to rebuild team spirit” within the group. His predecessor owed his ouster in July largely to repeated tensions with staff representatives and the management team, fueled by his direct and provocative style.
However, Oliver Blume arrives at the controls “a hard time” in the life of the first European manufacturer, says Matthias Schmidt, an analyst specializing in electric cars. The context is more uncertain than ever with the war in Ukraine and the continuation of component shortages.
He will also have to lead the Porsche subsidiary’s IPO this year and resolve the difficulties that are slowing the development of Volkswagen’s software, which should be the heart of the car of the future. The electric and connected revolution involved tens of billions of euros of investment, as the group posted mixed results in the second quarter
Synthetic fuels as an alternative to electric?
Joining Volkswagen in 2015, until then chairman of the board of directors of Porsche, Oliver Blume is recognized as more conciliatory than Herbert Diess. “Blume is not a man who fights wars”, summarizes for AFP Ferdinand Dudenhöffer, director of the Center Automotive Research. In detail, the new boss can stand on the issue of synthetic fuels.
Made from, in particular, CO2 in the atmosphere using electricity, they allow the use of traditional engines with very low CO emissions2. Herbert Diess chose to bet everything on battery-powered vehicles, unconvinced of the efficiency of synthetic fuels.
“Let’s keep pace” electrical strategy and “speed up if you can”, launched Oliver Blume to the leaders. Non-fossil fuels are however “complementary” and have some “advantages” in particular for their transportation and the compatibility with existing fuel pumps, detailed Oliver Blume in an interview.
Several projects are still underway
If the use of synthetic fuels on a large scale is not an option, talking about it allows us to imagine a future for the combustion engine. The sensitive topic will be decided in Brussels, which is currently working on a possible ban on new non-electric individual cars from 2035. Oliver Blume can be weighed for an extension of engines that use alternative fuels. At the risk, on the contrary, of not being able to advance “thoroughly” in electric like Tesla, the American competitor who is a pioneer, warns the experts.
Another project for Oliver Blume: software, the Achilles heel that initiated the ex-CEO’s exit from the road. While Herbert Diess wants to make a big profit by doing the coding in-house, his successor will be able to rely more on suppliers. because “To make software work, you need coders, not automotive engineers”summarizes Matthias Schmidt.
The new boss, on the other hand, must confirm the decision to focus more on the American market to limit dependence on China. The in-house production of battery cells, a key component of electric vehicles, will remain at the heart of the strategy.
For its six European battery mega-factory projects with a capacity of 40 GWh each, and one in the United States, Volkswagen has created a dedicated entity “PowerCo”, which can accept external investors.
“This may be the legacy of Diess, in addition to the launch of electrification after the dieselgate scandal” rigged engine, according to Matthias Schmidt. It will be up to his successor to make the legacy bear fruit. (with AFP)