It says so much about the state of the auto industry and its evolution that software problems have cost the CEO of an automaker his job.
Volkswagen Deposed Herbert Diess as CEO after severe software development delays delayed new product launches Porsches, Audis and You. This is unresolvable as buggy software has postponed the launch of VWFirst time deploying ID models and customers still have to drop car at the dealer for updates that the company has attempted to perform over-the-air.
Certainly, Diess also did not do enough to create allies and became increasingly isolated due to her tough leadership style. In his bid to transform the company into an electric vehicle leader, he has repeatedly clashed with labor leaders by warning VW is losing ground. Tesla and necessary to cut thousands of jobs. But failures at carmaker Cariad’s software unit eventually eroded Diess’ support from Porsche and the Piech family called the photos.
Back in December, VW overhauled its management, stripping Diess of some of his responsibilities while tasking him with managing the Cariad. Although there has been a lot of reorganization since then, Diess has not managed to make the problems go away.
Discord in the Cariad has pushed back the rollout of important new models, including electric vehicles Porsche Macana large volume utility sports car for the division that is planning an initial public offering in the fourth quarter. Audi’s new line of Artemis EVs has been delayed by about two years to 2027. And VW’s ultra-luxury brand Bentley Automobilwoche reported earlier this month that it may not be able to go all-electric by the end of the decade as planned because of software issues.
Matthias Schmidt, an independent auto analyst based in Berlin, said: “The takeover of the ship in the Cariad appears to be the downfall of Diess.
VW’s solutions to challenges tend to reflect its position as a giant company: it can throw a lot of money and people at its problems. But modernizing a company for the digital age will have to attract talent and build skill sets outside of the company’s traditional areas of expertise. Drivers are increasingly demanding services and intuitive user interfaces that can generate new revenue streams, if implemented properly.
“Software is the key to the future”, Tesla’s Elon Musk tweeted when one of his followers asked about VW switching CEOs.
Diess certainly does not lack ambition. His final spending plan called for an investment of 89 billion euros ($91 billion) in software and electric vehicles over the next half-decade. Last year, VW said it would eventually employ 10,000 people just in its software operation, which would make it one of the biggest European companies in the sector. Just three weeks ago, he revealed huge investments in China to employ several thousand software engineers in the largest automotive market.
Shares were also clear. Diess frequently sees Nokia’s failure to respond to the arrival of Apple’s iPhone as a cautionary tale, and he believes self-driving functionality will bring about a fundamental change in the industry rather than a shift to the next. the battery power.
VW is now turning to Porsche boss Oliver Blume as a team player and wise navigator of the different factions of the group. Unlike Diess, Blume doesn’t appear on LinkedIn or Twitter much, but he’s proven he can spot automotive trends. Former Audi trainee who has led Porsche since 2015 won the championship TaycanThe sports car brand’s first all-electric model, now outselling the 911.
Leading VW away from its software morass will not be an easy one. Schmidt said Blume needed to bring about a deeper cultural change at the Cariad for things to work well, and doubts that Germany’s auto regulators will be able to fix the business on their own.
“They should be hunting for the best from Silicon Valley,” says Schmidt. “You can’t lead in software with people in the auto industry.”
