Volkswagen Group is at a critical juncture. It has weathered the pandemic relatively well but is worried about new lockdowns in Europe to counter surging coronavirus infections. The automaker has full-electric cars under its ID badge rolling out but is well behind Tesla. And it has massive manufacturing scale but desperately needs to rethink its vehicles as rolling software devices.
It’s this last issue that CEO Herbert Diess drives home with VW’s more than 635,000 employees. The transition in competencies from industrial might to software prowess will be an immense challenge for automakers that are vast, deliberate and some say ripe for disruption. Car companies that get it wrong risk ending up like Nokia — failed hardware makers doomed by more nimble and technologically adept startups.
“Nokia is probably a good example of how such a change can happen—if you’re not fast enough, you’re not going to survive,” Diess, 62, told Bloomberg at VW headquarters in Wolfsburg. “I’m always telling our people this example.”
During an almost hour-long virtual event a week before VW’s supervisory board meets for its annual review of spending plans, Diess discussed how he is readying the company for COVID-19’s next wave, a possible new occupant of the White House and the rise of electric vehicles.
The following excerpts from the interview have been condensed and edited.
How has the pandemic altered VW?
We are very tense, very concerned all around the world because the cases are increasing again. We are better prepared than for the first wave because we established a lot of testing. For instance, alone here in Wolfsburg, we have test capacity of 2,000 tests per day. So we are trying if we have cases, to fence everything in. We want to make sure that our people are safe and confident if they come to work.
How do you keep people within the organization focused on this transformation when you have all these distractions around them?
Everybody thinks probably day in and day out about what happens with COVID, but in the long run climate change will be the biggest change mankind is facing and I would say nobody is losing sight. Even with COVID, we’ve seen that there’s more focus on electric cars, on keeping climate change in mind, preparing societies for the change.
Both themes are in our mind—short term, COVID, and long term, climate change.