Volkswagen CEO Departs

Volkswagen's CEO is resigning unexpectedly, effective September 1. On Friday, July 22, 2022, the company announced that CEO Herbert Diess will be replaced by Oliver Blume, the head of Volkswagen Porsche's performance car division.

Photo Insert: Herbert Diess took over as CEO of Volkswagen in 2018, following the company's "dieselgate" scandal, which compelled it to pay hefty US and European fines for misleading emissions readings.

Volkswagen, the world's second largest carmaker, did not give a reason for Diess' departure, according to Chris Isidore of CNN Business.

However, according to Reuters, citing unnamed sources, the Porsche and Piech families, who possess a majority of voting rights in Volkswagen, pushed for a change in leadership. Diess had a busy and demanding tenure. He took over as CEO of Volkswagen in 2018, following the company's "dieselgate" scandal, which compelled it to pay hefty US and European fines for misleading emissions readings.

Nonetheless, he was able to put the controversy mostly in the past. And, unlike many established automakers, he prioritized electric vehicles, setting Volkswagen for a big shift.

VW has stated that it will invest €89 billion on EV development over the next five years, which is over half of its projected spending for that period, and that it expects EVs to account for a quarter of sales by the end of 2026, according to CNN Business' Peter Valdez Dapena.

VW sold over 453,000 battery EVs globally in 2021, vaulting it to third place behind only Tesla and General Motors in pure EV sales — with most of the latter's sales coming from a Chinese joint venture. VW outsold all other automakers in Europe, including Tesla, with 310,000 vehicles.

Tesla still sold more than twice as many pure EVs than VW did in 2021 — and EVs accounted for barely 5% of VW sales last year — but Diess' shift in focus was critical for the company's future goals.

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