The company announced on Friday that CEO Herbert Diess will be replaced by Oliver Blume, head of Volkswagen’s ( VLKAF ) Porsche performance car division.
Volkswagen, the world’s second-largest carmaker, did not give a reason for Diess’ departure.
But a Reuters report, citing unnamed sources, said the Porsche and Piech families – who between them hold the majority of voting rights at Volkswagen – are pushing for a change of helm. The company did not immediately respond to a request for comment on this report. Still, he managed to put this scandal mostly in the company’s rearview mirror. And it’s focused on electric vehicles more than many established automakers, positioning Volkswagen for big change.
Electric focus
VW has said it will spend 89 billion euros over the next five years on electric car development, about half of planned spending over that time, and aims for electric cars to account for a quarter of sales by the end of 2026.
The number of battery electric cars sold by VW nearly doubled in 2021 to nearly 453,000 globally, rising to No. 3 behind only Tesla and General Motors in electric car sales — and most of the latter’s sales come from Chinese joint venture enterprise. VW outpaced all other automakers, including Tesla, in European EV sales by 310,000 vehicles.
Tesla still sold more than twice as many pure EVs as VW in 2021 – and EVs accounted for just 5% of the cars VW sold last year – but the shift in focus under Diess was important to the company’s future plans.
“Herbert Diess played a key role in advancing the company’s transformation. The group and its brands are viable for the future; its innovative capabilities and profitability are enhanced,” said Hans-Dieter Pöch, chairman of the company’s board, in a statement. “He not only guided the company through extremely turbulent waters, but also implemented a fundamentally new strategy.”
But not everything was rosy. While Volkswagen may be ahead of most traditional automakers in its planned shift to electric vehicles, it is lagging even further behind Toyota in the race for total car sales, a key metric in the sector.
Last year, Toyota reported 10.5 million total car sales in 2021, ahead of Volkswagen by more than 1.5 million. Before the pandemic in 2019, Volkswagen outsold Toyota by 200,000 vehicles with 10.9 million vehicles sold.
What’s more, Volkswagen shares have also lagged under Diess, gaining only about 10% since he was appointed CEO in 2018 — well below Toyota’s ( TM ) gains of 60% during that time. So far this year, German-listed Volkswagen ( VLKAF ) shares are down 28%.
As part of the management changes, Chief Financial Officer Arno Antlitz will become Chief Operating Officer.
— CNN Business’ Peter Valdez-Dappena contributed to this report.
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