At the wheel of Volkswagen, Oliver Blume wants to “accelerate” the electric transmission “where possible”


The logo of German automaker Volkswagen, on May 20, 2022 in Emden, northern Germany (AFP/DAVID HECKER)

Volkswagen on Thursday entrusts its future to a new boss, Oliver Blume, who aims to “accelerate on electric whenever possible” in a difficult economic environment, after Herbert Diess’s tumultuous four-year tenure.

A domestic product broken into the mysteries of the group, the new CEO is not enough to turn the tables: he must continue the main lines of the strategy led by his predecessor: the shift to electric and connected mobility.

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

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

The 54-year-old German adds that he will want to “rebuild team spirit” within the group.

His predecessor owed his ouster in July primarily to repeated tensions with employee representatives and the management team, fueled by his direct and provocative style.

However, Blume comes to the controls at “a difficult time” in the life of the first European manufacturer, notes Matthias Schmidt, an analyst specializing in electric cars.

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

He will also have to lead the Porsche subsidiary’s IPO this year and resolve the difficulties that are holding back Volkswagen’s software development, which was supposed to be the heart of the car of the future.

The electric and connected revolution involves tens of billions of euros of investment, while the group posted mixed results in the second quarter.

– No “wars” –

Oliver Blume, CEO of Porsche, at the Frankfurt Motor Show on September 10, 2019 (AFP / Daniel ROLAND)

Oliver Blume, CEO of Porsche, at the Frankfurt Motor Show on September 10, 2019 (AFP / Daniel ROLAND)

He joined VW in 2015, until then chairman of Porsche’s board of directors, Oliver Blume is reputed to be more conciliatory than Herbert Diess.

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

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

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

Herbert Diess chose to go all-in on battery-powered cars, unconvinced by the efficiency of synthetic fuels.

“Let’s keep the momentum going” of the electric strategy and “accelerate where possible,” Oliver Blume launched to the leaders.

Non-fossil fuels are, however, “complementary” and have certain “advantages” in particular for their transport and compatibility with existing gas stations, Blume detailed in an interview.

– Homemade batteries –

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

An electric Volkswagen ID4 assembly line at the Emden plant on May 20, 2022 in northern Germany (AFP/DAVID HECKER)

An electric Volkswagen ID4 assembly line at the Emden plant on May 20, 2022 in northern Germany (AFP/DAVID HECKER)

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

Oliver Blume could consider an extension of engines using alternative fuels.

Running the risk, conversely, of not being able to “fully” advance in electric like Tesla, the American competitor that is a pioneer, warn experts.

Another project for Blume: software, the Achilles heel that sent the former CEO off the road.

While Herbert Diess wanted to make significant profits by doing the coding in-house, his successor could rely more on vendors.

Because “to make software work, you need encoders, not automotive engineers,” summarizes Mr. Schmidt.

The new boss, on the other hand, is expected to confirm the decision to focus more on the US market to limit dependence on China.

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

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

“This may well be the legacy of Diess, as well as the pioneering electrification after the dieselgate scandal” of rigged engines, according to Schmidt. It is up to his successor to make the legacy bear fruit.

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