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Volkswagen Software & EV Transition — Updates From Execs

1) What is Volkswagen’s commitment to electric vehicles (EVs) going to be following the CEO switch and all the Group drama, and 2) how is Volkswagen going to try to solve its software crisis?

There’s a lot of hoopla around Volkswagen Group right now. The Group just took 100% control of Audi. Volkswagen’s CEO cut dropped in replaced by the COO — though, the former CEO is still CEO of Volkswagen Group. The ID.3’s (and Golf’s) software is reportedly a mess, and Volkswagen will delay implementing some features in customer cars. The entire thing looks like a full-scale soap opera, and I think there are no better articles in English for understanding what’s going on than this one (which a top VW manager said was exceptionally accurate) and this one, both courtesy Alex Voigt.

Alex has been digging to figure out 1) what Volkswagen’s commitment to electric vehicles (EVs) is going to be following the CEO switch and all the Group drama, and 2) how Volkswagen is going to try to solve its software crisis.

Regarding #1, Alex unhappily highlighted this quote from the new VW Brand CEO, Ralf Brandstätter, who was COO from the end of June 2019 until his recent promotion: “We have always said that in the long term we will continue to have different types of drive trains equally in our product line. Every customer can choose the technology that best suits their mobility needs.” Alex’s response, which if you follow the industry is a damning one: “This sounds like BMW and not VW.”

The good news is that an official response from Volkswagen appears to say, hey, don’t jump to the wrong conclusion, everything is still going as planned. “Volkswagen will continue to push ahead with the Strategy 2025+ and the associated electric offensive. Ralf Brandstätter stands unreservedly behind the course set by Herbert Diess.” That strategy and electric offensive aims to sell 1 million VW vehicles a year by 2023 and 1½ million by 2025. (Volkswagen Group’s target is 3 million by 2025.)

Regarding #2, Volkswagen’s software challenges and deep position behind Tesla*, Volkswagen’s board member in charge of IT, Christian Senger, was quoted in a German newspaper today stating that Volkswagen is focusing on developing its own software (which I already wrote about at length), is investing €7 billion into that (that’s a lot of money), all new VW models should run on that by 2025, and Tesla is Volkswagen’s guiding reference on that topic (quite a departure from how VW execs talked about Tesla a few years ago).

VW.OS, as the software is being labeled, is expected to be ready in 2023. “We want to combine the entire technical functionality in the (ID.3) car, but also modular infotainment functions and mobile services in a central operating system,” Senger said.

I’m not in the software business. 3 years sounds like a long time to wait for this, especially since it’s been a priority for a while already, but I also understand that software is a difficult beast and takes a long time to develop well for such complex matters as automobiles. VW’s big challenge right now is making sure it puts the right people in place to develop this software, has the right company structure to do so, and doesn’t get lost down too many rabbit holes in the process.

Perhaps the most difficult thing for VW when it comes to developing the necessary software is that the people controlling the company can’t actually judge whether the people they hire to do the job can do it well, and they would likely struggle a great deal to monitor the progress (i.e., be clueless on whether things are going well or going poorly until it’s too late).

*Full disclosure: I own shares in both Tesla/TSLA and Volkswagen/VWAGY.

Images in article courtesy Volkswagen.

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Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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