Following two failed negotiation attempts last year, VW chief executive Herbert Diess has received a hefty contract extension which will keep him around until October 2025. The group’s supervisory board was initially considering a two-year extension, but in the end, Diess will get the chance to see through most of the carmaker’s ambitious mid-decade goals.
One such goal is for VW to become the world’s leading electric vehicle brand, which would mean overtaking key rivals such as Tesla.
“The Supervisory Board believes that under the leadership of Dr. Diess conditions will be optimal for the continued successful development of the entire company in the coming years as well, especially in view of Strategy 2030,” said VW chairman Hans Dieter Poetsch.
Key components regarding Strategy 2030 include not just e-mobility, but also autonomous driving (software), which is expected to lead to the automotive market doubling in size within the next 10 years. Another main factor is “People & Transformation”, meaning VW will attempt to become more of a tech company, which in turn will require sustainable concepts for transforming the workforce and training employees in a broad range of fields.
According to Reuters, Diess’ contract extension wouldn’t have been possible without the recent departure of works council head Bernd Osterloh, who was once Germany’s most powerful labor boss and at the same time, Diess’ fiercest opponent.
Since stepping in as CEO in April of 2018, Diess managed to accelerate the pace of reform in order to raise margins, cut costs and boost software and battery cell development – the latter two being areas in which German carmakers tend to lack expertise.
Right now, VW is just getting started on its journey, as it only has two modern battery-electric models currently on sale in the ID.3 and ID.4 / ID.4 GTX, or three if you’re still counting the e-up! city car (still available in certain markets). Catching up to Tesla by the middle of this decade will not be an easy thing to accomplish.