Volkswagen boss Diess resigns surprisingly

Volkswagen boss Diess resigns surprisingly

The company announced on Friday that CEO Herbert Diess will be replaced by the company’s head, Oliver Blume Volkswagen (VLKAF)‘s Porsche Performance Car Division.

Volkswagen, the world’s second largest automaker, gave no reason for Diess’ exit.

But a Reuters report, citing unnamed sources, said the Porsche and Piech families – who together own the majority of voting rights in Volkswagen – were pushing for a change at the top. The company did not immediately respond to a request for comment on the report.
Still, he was able to mostly pin this scandal in the company’s rearview mirror. And he focused on electric vehicles more than many established automakers, positioning Volkswagen for a big change.

Electric Focus

VW has said it will spend 89 billion euros on electric vehicle development over the next five years, about half of planned spending during that period, and aims for electric vehicles to account for a quarter of sales by the end of 2026.

The number of battery electric vehicles sold by VW has nearly doubled to nearly 453,000 worldwide in 2021, climbing to third place behind only Tesla and General Motors in pure electric vehicle sales – and most of the latter’s sales come from a Chinese joint venture . VW surpassed all other automakers, including Tesla, in European EV sales with 310,000 vehicles.

Tesla was still selling more than twice as many pure electric vehicles as VW in 2021 — and electric vehicles accounted for just 5% of VW’s sales last year — but the shift in focus under Diess was important to the company’s future plans.

“Herbert Diess played a key role in driving forward the transformation of the company. The group and its brands are fit for the future, their innovative power and earning power will be strengthened,” said Hans Dieter Pötsch, CEO of the company, in a statement. “He not only steered the company through extremely turbulent waters, but also implemented a fundamentally new strategy.”

But not everything was rosy. While Volkswagen may be further along in its planned transition to electric vehicles than most traditional automakers, it has fallen further behind Toyota in the race for total vehicle sales — a key metric in the sector.

Volkswagen has already sold out electric cars in key markets this year

Last year, Toyota reported total sales of 10.5 million cars in 2021, surpassing Volkswagen by more than 1.5 million. Before the pandemic in 2019, Volkswagen had ousted Toyota by 200,000 cars with 10.9 million vehicles sold.

What’s more, Volkswagen shares have also lagged under Diess, up only about 10% since his appointment as CEO in 2018 — well below Toyota (TM)‘s 60% gains in that time. So far this year Volkswagen (VLKAF)Shares of Germany-listed are down 28%.

As part of the restructuring of the management, Chief Financial Officer Arno Antlitz will become Chief Operating Officer.

— Peter Valdes-Dapena of CNN Business contributed to this report.

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