"There is not much precedent for companies that succeed in the Old World and remain successful in the New World"
Compile the | Yang Yuke
Edit | Jane
Produced by | Bangning Studio (gbngzs)
As the world's largest automaker, volkswagen group is on a par with Toyota Motor. The Volkswagen Group once launched the Beetle that swept an era. In 2021, the German company sold nearly 9 million vehicles and generated more than $250 billion in revenue.
But for Herbert Diess, the journey was more of an obstacle course than a chase.
For the past four years, Diess has been at the helm of the Volkswagen Group. The vast majority of the cars it sells are gasoline-powered, and this model is gradually causing a growing global emissions problem. More importantly, this model does not have an advantage for the driver's money bag at the moment.
Dies has more pressing issues to address. Just a few hours' drive east of the Volkswagen Group headquarters, the war between Russia and Ukraine is underway.
The Volkswagen Group is already affected by this war. In March, Ukraine was forced to shut down some factories for its beam system. Wiring harness components were crucial to the Volkswagen Group – causing Diess to have to idle several assembly lines in Germany.
On the evening of April 17, 2022, local time in the United States, Diess was interviewed by the AMERICAN TELEVISION news magazine CBS "60 Minutes". In the interview, Dees and Leslie Stahl talk about the impact of the war, electrification ambitions, challenges in the U.S. market, and competition from Tesla, which is known to be building a new factory in Berlin.
The following is the content of the interview, which is slightly edited by Bangning Studio.
01.
About the effects of war
What parts do they (Ukraine) mainly provide you with?
Most of them are wiring harnesses and electronic components.
Are these important? What are the implications?
There are some that are critical, really critical.
So you've taken the hit?
We did get a hit. yes.
(The Volkswagen Group has suspended operations in Russia.) ）
How worried are you about the Russian factory?
It's hard to foresee the situation at the moment, but I think a lot depends on how soon we get back to the negotiating table.
Relatively speaking, volkswagen group is not late to exit Russia. I wonder, how hard was it for you to make this decision at the time?
yes. It was a very difficult decision for us, as we have around 7,000 loyal employees in Russia. We have 3 factories there and over the years, we have formed a customer base. So, it was a very tough decision. But that may be the only path we have at the moment.
On the question of the Russo-Ukrainian war, do you think the Volkswagen Group has a special obligation to act?
I didn't think that far. But we do have that history, and maybe we're more sensitive to things like that.
If the oil embargo were to be imposed, what impact would it have on the European economy?
A protracted war would greatly damage Europe and Germany, wouldn't it? The impact on Europe could be quite severe.
Do you think it's time to go to Iran, to Venezuela, to other countries? Western countries have not yet dealt with these countries.
It's possible in the short term, but in the long run, we may want to move to renewables at a faster rate, to wind and solar.
(There are also electric cars, Dies adds.) He wants all Volkswagen Group brands to have electric versions. Many models, not only the Volkswagen brand, but also high-end Audi, Porsche, Lamborghini, Bentley and Ducati motorcycles, etc., have at least 100 models. Also included are several electric cars, such as the ID.4 and the Porsche Taycan. ）
(Last month, I met Dies in Austin, Texas, and he wanted to show us a new Porsche electric car.) We found that Dees liked to surprise people, and even sudden fright, such as when he carried me and accelerated from 0 to 60 in a matter of seconds. ）
(Or when he stands on an electric surfboard and gives a speech to an employee.) This may be a metaphor for pushing the company into a new era. In the United States, the Volkswagen Group focuses on electric SUVs such as the ID.4. At the same time, a 4,000-person plant, with 4,000 workers, is being reconfigured to produce gasoline SUVs and will also produce all-electric ID.4s. Scott Keogh, president of Volkswagen USA, said they would introduce a new sedan like the Passat. ）
02.
About the U.S. market
In the sixties and seventies, in the United States, no one did not know about the Volkswagen brand, the Beetle that swept the United States. But since then, the Volkswagen Group has been underperforming in the United States. Why?
It's complicated. First of all, I must admit that we have lost the market in the United States, and I don't think we have paid enough attention to the American customers. We try to sell European products in the American market.
The Volkswagen Group excelled in China, Europe and Latin America. I mean, why are there so many twists and turns in America?
The United States is such an important market. In fact, we have always had internal debates, like "Should we give up the United States because of losses?" We're not going anywhere."
Indeed it is.
We have to revive the U.S. market, and we have to become influential in the U.S. Moreover, we have found the direction of our efforts. The so-called right direction includes electrifying a new version of the minibus, a model that was very popular with hippies and hipsters in the 1960s, which we called ID.Buzz.
ID.Buzz. Same as that old bus?
Yes, basically the same. With an interval of nearly 70 years, there have been many advances in technology, mainly in terms of security.
(Dees came to Austin to introduce Buzz to a new generation of young people at the South by Southwest festival.) He believes that carrying forward this cool model of the 20th century will help the Volkswagen Group regain the US market. ）
The best-selling model in the United States is the pickup truck. As far as I know, you have no plans to produce electric pickup trucks for the United States.
Not yet.
Not currently, refers to?
(Diess had promised that by 2030, at least half of them would be electric models, and dozens of fuel models would be eliminated.) ）
03.
About electrification
DIES: We have to decarbonize the world because climate change is happening. The only viable way to decarbonize the automotive industry is electrification.
You will have to change the engine, replace the transmission.
yes.
Or even design. As the old saying goes, old dogs can't learn new tricks.
That's exactly what we're trying. This is a huge challenge. Historically, there is not much precedent for companies that succeeded in the Old World to prove that they could still succeed in the New World.
Moreover, in the field of electrification, there are so many competitors.
yes. What's really challenging for us is the new competitor? No, it's from the software field, the battery field. It is said that Apple will also enter in the future, and these may be competitors that we must take seriously.
(To better compete, the Volkswagen Group is trying to recruit thousands of software and battery engineers around the world.) They have just opened a new battery factory in Chattanooga and have not yet started production. The battery factory is made by South Korean suppliers, and the Volkswagen Group simply assembles the finished batteries in its own cars. ）
Keo: We're going to step into the battery business and build more factories in the U.S. because batteries are a core necessity.
Is it possible to say that if you are a car company, you have to be a battery company?
Keo: Similarly, if you're a battery company, you've got to be a software company.
(The race is between tech companies and traditional automakers.) Ironically, the 2015 scandal forced the Volkswagen Group to switch to electric vehicles, thereby taking the lead. At the time, more than half of Volkswagen's cars sold in Europe used diesel, which was considered a clean energy solution to reduce emissions. But then, the Volkswagen Group was found selling diesel cars with software that cheated in emissions tests.
This was followed by 11 million vehicles being recalled. Volkswagen Group paid more than $30 billion for the incident, which also sent some executives to jail. At that time, Dees was still a newcomer to the company. ）
Do you think people have forgotten about it?
No, no, no. You know, it's a long time ago. Now, we have to convince our customers that we are worth considering and that we are delivering a good product.
truly.
(To save the company, they decided to abandon diesel and switch to electricity.) They also reached a settlement with the U.S. Department of Justice, agreeing to invest $2 billion in green technology, which includes building a large network of fast-charging stations called Electrified America. They drove us to a charging station near Austin. ）
(Charging issues are probably the least challenge Des faces.) With the spread of covid-19 and shortages of key components such as semiconductors, the business model of global companies such as volkswagen group is collapsing. In February, a fire caused cargo carrying 4,000 cars to sink, and the company was hit by shipping risks. Leaks in the clouds coincide with overnight rain – the COVID-19 pandemic is disrupting order in Volkswagen Group's largest market (China). ）
What percentage of your sales come from China?
About 40%.
Nearly half!
That's right.
04.
About Tesla
(While electric cars face all sorts of obstacles to getting started — wars, epidemics, shortages of engineers, etc., one thing is good for the Volkswagen Group — rising gasoline prices make electric vehicles more attractive.) Last year, the Volkswagen Group sold more electric vehicles of all types than anyone, but with the exception of Elon Musk. ）
How big is the gap between you and Tesla?
We are second in the world. Tesla is ahead.
Is the gap a mile, or is it insignificant?
Tesla is currently quite ahead of the curve and is growing fast. I have to admit that he (Musk) took bigger risks than we did, and he was building a factory in Berlin. Only 200 km from our factory.
Oh, my God!
I think it's very healthy for us to have a new competitor.
Is it?
Of course.
Your employees criticize you for using Musk as a benchmark, saying you talk a lot about Tesla and they don't like that.
In fact, you're right, they don't like that. [Laughs]
(Part of this article is comprehensively reported by Automotive News and Staff Reports, and some of the pictures are from the Internet)