VW’s Diess says existential electric race awaits after pandemic

Volkswagen Group CEO Herbert Diess said the automaker will pursue a sweeping transition to electric cars, declaring it a matter of survival even as the coronavirus risks upending business in the near term.

While VW has a “healthy order bank,” its development in the coming months hinges on major economies controlling the disease and averting restrictions that would hurt demand and operations, Diess said Thursday.

Despite the uncertainties, VW will press ahead with aggressive investment in new technology to avoid falling behind as the auto industry fundamentally changes.

“If you are not fast enough, you are not going to survive,” Diess said during a virtual Bloomberg event. “In the long run, climate change will be the biggest challenge mankind is facing.”

Diess said another lockdown would be “difficult to manage” even though the automaker has shown it can weather turbulence. It swung back to profit in the third quarter — echoing robust results from other automakers including Daimler, Tesla and Ford, Fiat Chrysler and GM — on the back of a swift demand recovery in China.

Another wave of new infections in key markets, an unsettled U.S. election and Britain’s messy exit from the European Union are now among the risks facing the auto industry. Registrations fell in the European Union’s four largest auto markets last month, signaling that sales have relapsed after a surprise gain in September.

Beyond managing through those issues, the more complex task for the 62-year-old Diess is positioning the 83-year-old industrial behemoth for the future. VW Group, which operates the Audi, Porsche and Lamborghini brands, wants to control the software brains for next-generation vehicles.

“This is the most important race and decisive point for our industry in next five to 10 years,” he said, adding he will not compromise on the company’s technology roadmap even if the coronavirus crisis saps sales.

“We think we can do it. We have software skills and we are ramping up fast.”

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