Volkswagen has been known for its heavy investments into electric vehicles, which is backed by a man named Herbert Diess. However, on June 8th, 2020, Herbert was replaced as the CEO of Volkswagen, consequently dissipating his ambitious plans to electrify Volkswagen.
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After becoming the ceo of volkswagen in 2018, herbert d saw a massive opportunity to shift volkswagen's focus to electric vehicles. However, herbert knew that tesla's ev technology was far superior to volkswagens and decided that the only solution was to go all in on electric vehicles. In order to do this herbert put out an ambitious 38 billion dollar plan to transition, the entire fleet of volkswagen to electric, while it seemed like a logical move to herbert other, volkswagen executives saw it as risky and radical on june 8, 2020. While herbert was preparing to cut down volkswagen's investments in gasoline cars, the supervisory board removed herbert's role as the ceo of the automaker in this video, i'm going to explain how the man who spoke up about tesla was replaced if you're new to the channel.
Please consider subscribing for more content like this and let's get right into it. After being caught lying on emissions tests in 2015, volkswagen was in big trouble and struggled to fix its reputation. It was a deceit on the greatest level all of their advertising claimed. It was clean diesel eco-friendly.
It was a complete fraud, as the years passed by volkswagen began to return to its usual profits in the first half of 2018 volkswagen's deliveries, sales and profits had all increased year over year. However, after rising to the ceo of volkswagen herbert knew that the automaker was in huge trouble during a press conference wrapping up the first half of 2019 herbert congratulated volkswagen's performance, but ended his speech with a looming announcement. We cannot rest our laurels because great challenges lie ahead of us in the coming quarters. After proposing his 38 billion dollar eevee plan herbert was faced with an immediate challenge: the automaker's risk-averse culture, a feud began the start within volkswagen's board, with one side supporting herbert's, ambitious plans and the other side supporting a less risky transition to evs.
Nonetheless, he continued on advertising for a change in the way volkswagen was run, of course, you're really working on turning around the culture to make the culture more more, let's say, responsive, more failure, tolerant! No, and we are we try. Cultural change takes time. One of the largest barriers was managing the conflicting interest within these shareholders, unlike tesla, where elon musk can quickly move forward with new gigafactories or vehicle designs herbert had to satisfy a wide variety of parties. Before moving on with a simple decision, the largest and toughest of these parties is the family controlled shareholders.
Unlike a typical company that has a board filled with powerful representatives, volkswagen's board of 19 members is filled with large shareholders. This is primarily because of a man by the name of ferdinand porsche back in the mid 1900s ferdinand was the largest shareholder of volkswagen. With the majority of the voting shares as ferdinand began to age, he knew that eventually he would either have to sell these shares or pass them on to his family. By selling. The shares ferdinand would be able to secure his family plenty of cash in the future, but this cash would be quickly spent and was not going to fuel the family for generations to come. So ferdinand decided to go with the second option, which was to pass his shares onto his family as the generations continued to pass down their shares in volkswagen. More and more family members began to own a large stake in volkswagen. Today, 53 of the voting shares of volkswagen is owned by descendants of ferdinand porsche to top it off.
The state of lower saxony in germany owns 20 of the votes. After all, this government and family ownership, less than half of the board seats, are actual volkswagen, labor representatives, due to this structure herbert had a hard time executing his goal to electrify volkswagen. The the governance is, is challenging in volkswagen. It's very big.
It's very international. We have many stakeholders which not always coherent interests, but so far i think we we get the act together now, while herbert was in a tough position, he was still able to convince and execute on his plan. One of the main ways herbert did. This was by pointing out the obvious facts that tesla was far more advanced in electric vehicle technology.
For example, in one interview herbert openly stated that tesla was 10 years ahead and without aggressive investments into evs. It would just be a matter of time before volkswagen would go bankrupt after months of hard work. Herbert was able to convert its zikwa and dresden factory to electric plants and invest in new battery technologies, and we no no. We did a lot to prepare.
We invested heavily to adopt to the new uh after and after regulation in the united states investing heavily. We just had breaking in our plant in chattanooga to double up capacities. We soon will put all the machinery there to ramp up production for a new eevee electric vehicle for the united states. We are really ramping up our software capabilities buying companies building up new skills.
We are heavily investing in evs in battery cells, so i think we're doing the right things to be competitive. A few months later, volkswagen was preparing for the release of its first prominent electric vehicle named the id3. However, the release of the vehicle was delayed for months because of software issues and being the ceo herbert took much of the blame for the issues. After realizing that volkswagen needed more cash to put into electric vehicles herbert began developing a plan to cut down volkswagen's investments into gas-powered vehicles which, due to the tension at the time, was poorly received after confidential information was leaked to the media.
Herbert was frustrated at the board and criticized several board members for leaking the information. While we never got to know what confidential information he was talking about, rumors are that the software issues for the id3 was never intended to be leaked in that the group opposing herbert's ambitious plans purposely leaked the information to help remove herbert's position as the ceo of Volkswagen, after many members of the board, got scared that herbert was driving down the value of their volkswagen shares herbert was removed. As the ceo of volkswagen on june 8, 2020. squabbling at the top table of volkswagen has resulted in a management. Reshuffle. Herbert diese was replaced as chief executive of the vw brand on monday chief operating officer. Ralph branstetter is to take on the role the reshuffle comes after weeks of spats between vw's, powerful labour leaders and managers over the pace and scale of cost-cutting plans. He's been battling to get the company's powerful labour leaders who control nine of the 19 seats on the supervisory board to agree to painful cost cuts.
The savings are designed to help pay for a 34 billion euro or 38 billion dollar investment in electric and autonomous cars. Dece was also under pressure after vw was forced to halt sales of its newest golf model because of software glitches, while volkswagen claims to still be interested in transitioning to electric. The truth is that the automaker is still far less ambitious. Now, when it comes to investing in evs, one analyst reported that the volkswagen transformation thesis is at the least being delayed.
The demotion of herbert these are ceo of volkswagen, doesn't just represent the end of herbert's ambitious plan to electrify, but all of the legacy automakers herbert deeds is a manifestation to other legacy. Automaker ceos that if they begin aggressively risk taking into the ev transition, then the consequence will be a story of anger, defiance and emotion. Let me know what you think about the demotion of herbert d's in the comment section below. If you enjoyed this video, please hit the like button and subscribe and i'll see you in the next one.
Like Bob Lutz said: VW, GM, MB, Toyota, and the other legacy OEMs are headed to the graveyard…….
Notice GM Mary Barra? So far GM CEO is treated with kid gloves by the GM Board of Directors and so call “business/financial media”. Will Barra ever be put under the microscope instead of the “sweet” softball questions on CNB-S, and gasbag Jim Cramer?
Well, in some ways firing Diess was the right move. When you are an industry leader in something, like Tesla is in EVs, you end up burning a lot of money "finding the right way to do something" and then your competitors profit. I've seen this throughout history. Even Tesla could end up owning nothing more than an expensive bundle of patents while competitors adopt and perfect Tesla's techniques. The VW board may have sensed this, and fired Diess. Better to be second best than try to be first to market, unless the technology is truly disruptive, which EVs are not (currently they are like driving an ICE car with half a tank of gas, hardly radical in performance). Unless solid state batteries are perfected in about 10-20 years time, EVs are doomed to fail.
He is a gasoline car maker. It is time to get rid of him. People like him is destroying the planet.
VW may go the way of Toyota and become a dinosaur within half a decade, because as a legacy automotive manufacturer deeply entrenched in what has rapidly become a technology unsuitable for mass use, they decided too late (amidst the ongoing Green Revolution to clean up Mother Earth's environment) to commit to full scale EV development and production. ICE vehicles cost more and are less efficient. ICE vehicles pollute far more than the indirect pollutions of EVs. Compare old coal power plants to newer natural gas power plants, and then those to clean solar power which has (due to the economy of scale) become the lowest cost means to generate electricity, bar none. Differences in provided examples are not remotely close! Appeal of ICE cars is dying fast.
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I can somewhat see what the boardmembers mean it is really risky investing this much into EV's since we don't know what the future holds mybe it will be hydrogen cars for example invest but be carefull since i can guarantee that for the comming decades gas is going to be king. This also means that you have to stay ahead of the game there maybe by investing slightly more into gas cars then competition. It's easy to say that electric cars are the future but nobody knows/
Shameful to can the man that could possibly put a shot in the arm of an already huge company that could launch them into an even more dominant position.
Thank you for clarifying in details of this horrible group. EV is the new standard. Take a look at American Automakers making the big leap and change. Got to move with the times.
I will not buy a combustion vehicle again. I was considering VW, but now, after hearing this news, I will go for Tesla.
Herbert Diess is still the CEO of the biggest carmaker in the world Volkswagen and leads VW, Seat, Skoda, Audi, Porsche and other brands owned by Volkswagen to a full-electric and all-digital future.
Thought VW might be 1 legacy that could survive for a while, now after hearing about their corporate structure they are soooooooo dead. Tesla, NIO and maybe Rivian(only cause Bezos hates Musk, but money is king and self driving might force Bezos to change his tune) are going to be the only car companies left. Amazing how successfully disruptive a company that has so much interest in their failure is.
Late stage public company syndrome. Just keep making more refined versions of the one that preceded it. Absolutely fine whilst the market, society, demand etc remains the same, but a death-sentence if any of those things change and change they have.
This is why legacy companies will Fail. they think they can hold back progress But they can’t and tesla will crush them.It’s all about short term profit with no vision of the future. Elon musk Will go down in history as A genius. P.S I currently own a VW However my next car will be a Tesla for sure
Don't worry!
Tesla will pick up the electric sales share all over Germany and employ a good chunk of workers at their assembly plants.
Matter solved!
Powerplant have been shutting down ?? The grid is 100 years old, computer crap auto's !! They can't handle the pot hole's,built to break?? Go back to basics?? They aren't better trucks or cars smog only ,
This is exactly why legacy companies fail, the establishment takes over and becomes parasitic
well… the union wants to drastically reduce its emissions in a very short time, so they'll have to change even if they don't like it
Electric cars will fail as they did in the beginning of the 20th century. Range problems have no been solved, all that has been done is to put more batteries in these cars with marginal improvements to how the batteries are used. The Elephant in the room is disposal of these batteries that are unrecyclable. I foresee a large green tax. Also what about heavy haulage? No talk about this.
Not exactly the same but Toyota is doing catchup now. They even invested and partner with Tesla.
I feel many executives are just looking at their own pocket and if they cannot make money anymore they move to another company instead of playing the long game. I could be wrong but just seems like it.
The problem with the family company. Yes, I do believe that WV is a family company due the many shares are controlled by descendants of Ferdinand Porshe is that those family members will eventually lose focus and become a drag for the company and quite often the weakest link which will send the company to its knees.
Elon did it again,,,,
Here are the numbers for TESLA SEMI TRUCK: Weight of the rig 36 tons max. width / height 2.5m/4.1 m CD = 0.36 , rolling resistance = 0.012. Required power at 100 km/h (60MPH) = 153.27 KW.
Battery 1000 KWH. Range 408.5 miles at 60 MPH. IT IS ALL FEASIBLE!!!!!!!!! ROLLING RESISTANCE POWER IS AROUND 2 TIMES BIGGER THAT AIR RESISTANCE POWER (107.91 KW vs 45.36 KW)
So there is still room for improvements, lower Cd and better tires with lower rolling resistance. Current energy consumption is around 2.5 KWH/mile.
At some point, gas powered cars will be a thing of nostalgia. EVs are getting more powerful, having longer range, and eventually the charging technology will get to a point where you would hardly have to wait for your car to charge. I think he was right, if they don't start making the change, they just might get left behind.
This YouTube video takes right facts but interpreters them in a wrong way.
1. Diess will still remain the head of the vw group – so he will still have a lot of power and will be head of the largest car manufacturer world wide.
2. The analyst may say that VWs investment may have decreased, but in fact VW announced last week another investment of 15 Billion in EVs for the Chinese market (33 Billion previously world wide).
So the conclusion that his mission to fight Tesla has fail is i.m.o. not correct.
Btw last month there was a video with him an Elon an they seemed to be friends.
Yeah, Herbert was at least understanding what is inevitably going to happen. Of all the auto manufacturers, VW was, under Diess, the only ones at least trying to change. Too bad, they're all going down.
In old big established company's the value for big shareholders tend to shift from stock growth to dividend, leadership pay/bonuses and corporate payed expenses. This stops expensive restructuring and adoption of new tech as the big boys get more by just milking the company for what its worth and then moving on when it fails. Its all about the incentive structure.