Challenges For Volkswagen's New CEO, Tesla's biggest EV Competitor

by Anusuya Lahiri, Benzinga Editor
July 25, 2022 7:43 AM | 2 min read |
  • A diverse set of pressing issues await Volkswagen AG's VWAGY newly christened CEO Oliver Blume, Bloomberg reports.
  • The issues included listing Porsche AG VW's blockbuster asset amid the worst volatile market for initial public offerings and fixing problems at the software division postponing new electric Porsches and Audis.
  • Aggressive strategies for EVs, software and new mobility offerings characterized ousted CEO Herbert Diess.
  • Also Read: Volkswagen, STMicroelectronics Collaborate To Counter Auto Chip Crisis
  • It's up to Blume to follow through in transforming the world's second-biggest carmaker to better contend with up-and-coming Tesla, Inc TSLA and others.
  • The Porsche IPO, touted as Europe's most significant ever, has the potential to boost VW's valuations. However, governance concerns, potential recession risks, surging energy costs, and geopolitical tension could take a toll on Porsche's valuation.
  • VW's efforts to build its software operation struggled with strategy shifts, administrative issues, and product delays. Contrastingly, Tesla took to the cake by regularly deploying over-the-air updates adding to its EV capabilities and performance.
  • Though VW stopped losing money in America, it remained a long way from closing the gap with Toyota Motor Corp TM, General Motors Co GM, or Ford Motor Co F.
  • Though Audi has long sought to take on Mercedes Benz Group AG DMLRY and Bayerische Motoren Werke AG BMWYY in the luxury segment, it has no production footprint in the US.
  • VW has been losing share in its biggest market due to poor handling of the chip crisis and lack of digital features.
  • In contrast, after quickly turning the Shanghai plant into its most productive globally, Tesla added factories in Austin, Texas, and near Berlin this year. 
  • Previously, Diess acknowledged that he saw Volkswagen beating Tesla in EV sales by 2025.
  • Price Action: TSLA shares traded higher by 1.30% at $827.32 in the premarket on the last check Monday.
  • Photo via Wikimedia Commons
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