Profits are bubbling up at Volkswagen. “We earn more than ever – despite the lack of semiconductors and stagnant supply chains,” said the CEO Herbert Diess (63) on Tuesday at a staff meeting in Wolfsburg. The bottleneck in electronic components that has persisted for many months is finally easing. “We are increasing our volumes, not only in Germany, but above all in China.” In view of the uncertainty caused by the Ukraine war and concerns about an economic crisis, the group will carefully increase production again, “not blindly going to 100 percent capacity.”
Diess believes that Europe’s largest car group is already prepared for a combustion ban. Such a step, which could relate to new registrations from 2035 and is currently causing controversy in the federal government, must Volkswagen “Don’t be afraid,” the manager continued. “It can come – we are best prepared,” said Diess. He referred to the electric models already on offer and those still planned, as well as the group’s strategies for its own battery cell production and software.
After the diesel scandal almost seven years ago, the Wolfsburg-based company was one of the first traditional car manufacturers to switch to electromobility and is investing many billions of euros in it. The goal is a group that, in addition to selling cars, will earn its money primarily with mobility services in a few years.
The EU environment ministers wanted to vote on the future of combustion cars after the majority of the European Parliament voted in favor of ending sales of petrol and diesel engines by the middle of the next decade. While the German department head Steffi Lemke (54, Greens) supports this, criticism comes from the FDP. The liberals want new cars with internal combustion engines to be registered later if they can be shown to be fueled only with climate-neutral synthetic fuels.
“Tesla is weakening. We have to seize this opportunity”
VW boss Diess believes the US archrival Tesla to be able to catch up soon. The company of Elon Musk (51) remains the biggest competitor – but look at the complexity of the new factories in Grünheide near Berlin or in Austin (United States) that not everything runs by itself there either.
“Tesla is weakening,” said the CEO. “Elon has to start up two highly complex factories in Austin and Grünheide at the same time – and expand production in Shanghai. That will cost him strength,” said Diess. Tesla boss Elon Musk himself says that these factories are currently burning money. “We have to seize this opportunity and catch up quickly – in 2025 we can take the lead,” said Diess combatively.
The gap could decrease in the current year, but VW should at least “not let it get any bigger”. Other E-models will soon follow: from 2023 the ID.3 will also come to Wolfsburg, in 2026 the Trinity will start on a new platform with homemade software.
After another violent upset with the employee representatives about possible savings plans for the VW headquarters, Diess now sees more unity: “I am particularly pleased that Daniela Cavallo
(47) and the works council are driving this transformation in close cooperation in a competitive manner. It is necessary to make Wolfsburg future-proof and to secure jobs in the long term. Wolfsburg can survive in the competition against Grünheide.”
Cavallo was more reserved because of the optimism spread by Diess. She also referred to the historically high level of orders. “The order books are literally bursting at the seams. And: We make really good money, even if the volume is low,” she said, according to her speech manuscript. The earnings from it are “incredible”. However, Cavallo warned of an economic crisis in view of the economic effects of the war in Ukraine: “It cannot be ruled out that, with the momentum of hundreds of thousands of orders behind us, we will hit the wall of a global recession.”
The topic of software remains difficult.
There are said to be major delays in the expansion of the group’s internal IT subsidiary Cariad – under the direction of the individual brands Audi and VW should therefore continue to develop certain assistance systems in parallel for a few more years. This again campaigned for understanding. It’s a long-term project: “Nobody else dares to bundle all the software skills. It was clear from the start that there would be some challenges. But that doesn’t mean that Cariad has failed.”