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  6. Volkswagen forges ahead with structural transformation

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Volkswagen forges ahead with structural transformation


Herbert Diess, CEO of the Volkswagen Group, is certain that the overall situation regarding e-mobility is becoming increasingly dynamic, both in terms of speed and the extent thereof. This has just as much to do with the debate surrounding combustion engines as the current CO₂ emissions standards stipulated by politicians, explained Diess during his speech at this year’s International Suppliers Fair (IZB) in Wolfsburg.

“Manufacturers will have to convert their fleets even faster than was previously anticipated. While this represents an enormous challenge in terms of production, at the same time it creates a massive new market, particularly for battery cells,” said Diess. “We are talking about revenues between €50 and €60 billion. If the electric portion rises even faster, then it could even be a €100 billion market.”

The rapidly growing market demonstrates how the automotive industry is changing, however, this transformation is also associated with risks, Diess explained. “From today’s perspective, there is perhaps a 50-50 chance that the German automotive industry will still belong to the best in the world ten years from now,” said Diess.

Furthermore, he explained that this is not a matter of wanting to stop structural change in the automotive industry, noting that this kind of mistake has been made in Germany’s coal mining sector for 50 or 60 years. “Our aim has to be to forge ahead when far-reaching changes are required,” said the CEO of Volkswagen. However, Diess highlighted the crucial importance of the overall approach to the transformation and how quickly it is implemented.

A plea for an objective approach to the current diesel debate

Diess once again criticized the emerging stricter EU limits for emissions and made the case for a more objective way of handling the current diesel debate. “The current vendetta against individual mobility – and thus the car – is turning into a crisis of existential proportions.” In doing so, he pointed to the “nearly hysterical discussion surrounding nitrogen oxide,” regarding a few problematic areas in German cities.
Furthermore, Diess critically remarked on the energy mix in Germany and its impact on electromobility. “Unless we manage to generate our primary energy without emitting CO2, we’ll essentially power our cars with coal rather than gasoline or diesel, even if we drive electric cars. This will take the idea of electromobility to absurd lengths!”

 His intention is not to fuel fears, but rather to provide a realistic understanding of the challenges facing the automotive industry.

The changes within our industry are enormous. They pose challenges as well as risks, but above all they create great opportunities.

Herbert Diess CEO Volkswagen Group

Diess gave the speech during the IZB, Europe’s leading fair for the automotive supply industry, which has been underway in Wolfsburg since Tuesday. It is regarded within the sector as an important marketplace for information surrounding innovations and as the most significant event for interacting with suppliers. The trade fair that was initially launched in 2001 as a regional exhibition for automotive suppliers features 838 exhibitors from 34 nations this year. With the main topic is “Think Digital”, the event focuses on the multifaceted field of digitalization for the entire automotive value chain.

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