To avoid that, it will have to master software development.
Herbert Diess admits that knowing how to build cars is just a small part of the business nowadays. All the experience Volkswagen has acquired on that skill along decades is not enough when you have to build electric cars, and these EVs have to integrate with the internet. That’s what the smartphone did for mobile phones. Diess definitely does not want his company to be a new Nokia, as he told Bloomberg.
The interview with Volkswagen Group’s CEO happened one week before its Supervisory Board meets to discuss expenses. According to Diess, the automaker knows it has to discuss the COVID-19 pandemic in the short term and climate change in the long term.
Global warming is pushing cars to become electric, but we should add that it is not the only reason. In a world where energy efficiency increases its importance to become vital, wasting 60 percent of such energy burning fuel inside engines does not make sense anymore.
Diess knows that, and he is confident he has helped prepare Volkswagen for what’s to come in the best way possible. According to him, the Supervisory Board will discuss strategies for the next four to five years. Considering Europe will be an electric car hub, he believes Volkswagen is one of the most prepared companies for such a shift.
For the automaker to achieve that, it must be worried beyond manufacturing vehicles that are powered by electricity. The CEO believes they have to be effectively integrated with the internet, just like smartphones proposed when the first iPhone appeared. Taking people places and carrying stuff will be just part of the mission – as much as making phone calls is not a smartphone's main goal.
To get there, Volkswagen intends to develop its own operating system and “to give it to other parties.” That more of an Android approach than what Apple did. Hon Hai (Foxconn) proposes to do the same thing, which shows automakers will not compete only with similar companies in this transportation revolution.
Tesla could be considered the first outsider to such a traditional market, and Diess reputes it as a “very important competitor” because it already has capabilities Volkswagen is now willing to develop. Anyway, the CEO said that “the battle for market leadership” when it comes to EVs is still open. At least Diess knows what Volkswagen has to achieve to challenge the current leader.