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Herbert Diess

lines on the record: 75
first: 2022-01-18
most recent: 2022-01-18
sittings or episodes: 1
sources: podcast

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“That's the least what I'm trying to. Once in a while, I drive girl in Euros, and people would already look at me. Now, actually. I drove this year through. I mostly drove electric cars, mostly in ID3, which I have two one here in Wasburg, one in Munich, because also to share the customer experience, not to get how is the car working, our networks are working. And actually I like to drive electric cars, one or the other audi models, and I have really the privilege that I can swap cars, so it's really good. And now I'm getting, I have to say, I have kind of... Fallback, I will get Golf R as the next car for the next half year or so, which I'm also looking for.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Will mostly come from EVs. We are trying to push the market share with EVs. I think we have a good chance now with products like the Microbus, like the IG models, which are well perceived, which are selling very nicely. There's a few more, I would say, models to come which would suit the Americas. We are considering some more Audi models for America. And that's what I'll be EVs. It's not yet all decided, but I think this electrification allows us for a redefinition of our market position, of our brand perception. And I'm 100% sure that it gives us a new chance for getting back to where we should be, a volume manufacturer in the United States with a proud manufacturing footprint in Chattanooga and becoming much more of an American company as well once again. Now we are two Chinese and two European for the moment.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“I think it will continuously improve over time because capacities will shift into higher margins, which are cars. But it's a structural problem, and there's a lot of investment getting into chip manufacturing, but it's a three years investment period until we see that. So through 22, quite sure we will see constraints hopefully 23, we will get back to satisfy demand and then hopefully we have a new setup because we are now digging much deeper into chip design chip supply. We are influencing much more. We are getting into direct sourcing. We have dialogue across our first years into direct production. So we're doing a lot. We will improve.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“So we're trying to really push and squeeze. We have a task force running. I'm optimistic that we can do better than last year. Will we be able to deliver all the cars we wanted? No, because we have really, really strong demand. And we will have some constraints still, which is my biggest, I wouldn't call it headache, but I have a lot of focus on this area, I have to admit.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“We have to see that this is a structural problem which will continue, so we will still have constraints, we will better manage than last year. We had quite a good start the first two weeks, but there are constraints visible which are structural because the chip demand is just growing so fast and we are very depending on second third tier supply on chip manufacturers. We are trying to do our best to sort to help to improve, to get higher margins for the chip industry because at the end it makes a lot of difference whether the same chip ends in a refrigerator or in a car because in a car it gets much higher.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, good question, and it's always time between the years as we call it, not between year and start of the year to rethink and reconsider. And I would have been with the achievements of 2021 really, really happy. I think we made a lot of progress. The teams performed extremely well. Gained market share in some areas. And also my outlook for 2022 was very, very positive. Besides Chips supply.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Which allows for CO2 savings of comparable to 870,000 cars per year, so it's huge, CO2 savings is huge. And I received probably, I don't know, a call every week from countries like India and they wanted to buy this power plant, this coal-fired power plant. And just to build it up somewhere else, we could avoid it at the end was not easy. But now think about it. It doesn't make sense to electrify the mobility world if we don't first make the primary sector CO2 neutral. The world is not the same. In France, they have zero gram CO2 per kilowatt hour because it's all nuclear. No, it's 7 grams. In Poland, they have a thousand grams because it's all coal-based. The same would be in South Africa. So it has to be staggered. It has to be primary energy, cars, networks, primary energy cars.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Are second or third position in the Latin American markets in Brazil and in Argentina. They run their cars on many of them base of Ethanol, which is basically CO2 free, not entirely CO2 free. It's bioethanol. And for them, it just doesn't make sense to switch so far to electric cars. They still would need combustion engine technology. And that is why I have to say as an international company, you know, there's a lot of bus now in India becoming electric, but 90% of the energy production is on coal. So we have to change. And I'm just, we have been also nice story. We have still a coal-fired power plant here in Wasburg, in our headquarters, which we decided already some three years ago to dismantle and substitute it with a gas engine.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Hard to say, you know, some of our peers are, let's say, making statements, and I'm not sure whether they should do that, because at the end, this is a decision a car manufacturer cannot take, because it has to do, do I have the primary energy? Do I have the networks? Are the people prepared to switch to electric cars? Do they have the right incentives? If you look in Europe, no diesel now has been for a few months now at 90 cents or one euro. It's very difficult to compete with an EV car against such kind of prices. So this has to go hand in hand. And the run out of EVs will depend on the legislation and on the build-up of renewables. And this will dependent on state policies and on a comprehensive policy and not individual decisions of car manufacturers. Think about...”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“It doesn't make sense to sell electric vehicles there. Now think about Poland, I think it's 100% coal currently. So before we sell electric cars, we have to convert the primary energy sector into renewables into 100% renewables. It's already fine in France, in Norway, in Austria, in Europe, in some parts of America, in some parts of Canada. But this has to go hand in hand with the conversion of primary energy production. And this requires time. This is why two ambitious plans will not work. They will be even counterproductive because running EVs on coal-fired power plants is even worse than running gasoline cars.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“ICE cars, it's just impossible. The second thing is that electric cars only make sense if the energy is renewable. If only if the energy is really green energy, it comes from wind or solar or nuclear. But as long as we have nations based on producing electric energy on coal,”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Do that. It's really, and I have high respect for our team who is really facing the challenge because you have to buy all the machine tools. You have to build the plants. You have to find the locations. You have to train the people. You have to make sure that the supply of the raw materials is safeguarded and secured. This is huge. The transition will depend for sure on the scaling of and we are only 20%, so six plants. So Europe needs 30 of those plants. Each plant two kilometers times one kilometer size. This is huge and huge quantities of raw materials have to be moved and digged out of the. So this will be challenging. And then to, let's say, get from 50% to 100%, it still will be a tremendous challenge. So it's not just let's switch off.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Structure not necessarily. I think this transition into EVs has certain constraints. Now, I think the plan now 50% by 2030 is extremely ambitious. Imagine that means only we own here in Europe about 20% market share. And for those 20% market share maintaining that 50% EVIS, we need six giga factories, which has to be, they have to be up and running by 27, 28 to be able to deliver on our 27. It's close to impossible.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“This all tracks with you have said VW will stop selling gas cars in Europe by 2035. I'm assuming that date is driven by when do you think you'll have enough batteries? When will there be charging infrastructure?”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Transition. Now, he's now, I think, the second biggest battery manufacturer, market capitalization is about 200 billion, something like that, extremely fast growth and is extremely innovative, CATL. And I tried the same with the German first year suppliers. They would have been well prepared, no, you named them. I tried the same thing because I knew that we would need a huge amount of battery cells. And this, you know, the turnover only of our battery cell business perspective to 2030 when we will build 50% EVs, not 2030, will have a turnover only for the internal demand of 20 billion, which is half the size of Bosch or one of our big first years. Because we need the quantity of batteries and the quality of batteries.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Good question. Good question, and I have to tell you a story there because you know I used to work for another company in 2013 still or 12 when I first visited a small company in China which was called CATL and they would have a turnover of I think 200 million or so or 300 and I would do pouch sales for smartphones for an American customer for a big American customer and I visited them and said I need Battery cells for cars, first for plug-in hybrids and then for electric cars. And the guys looked at me and said, we can't do cars. It's too big, not a facilities. And they were really not prepared, but I could convince them. And CITL is now, and Robin Chang is, let's say, the CEO and founder once in a while I follow up with him and he made an exception.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Not 100%, no, but whenever it's necessary, the new business model requires to, you know, you can't run electric cars without networks and without batteries”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“We didn't shift. We have to use all of them because it's a growth. We need just so much that no sole company would have been able to do all the investment. And just recently we decided to build our own battery group. Tomas Mal is leading that, a colleague of mine. And we are looking also later at some external companies. The first plants we will finance ourselves, but we will invest in battery because it's so much growth necessary and we couldn't find enough suppliers to do the job.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“From Austria, it was only once that I had to wait on a charging pole. So that means that I think it's a lot discussed. But also in the US, you can go from West Coast to East Coast without stopping. So I think we overstate the issue and it's growing really fast. There's so much investment going in. And it's not only auto. Now, everyone is investing in charging networks. The utilities companies, the petrol companies, they also are changing swiftly. Currently, for instance, we agreed with BP, they are running the biggest refueling network in Germany. We will convert all the fuel stations into charging within two years' time period. So it's a lot of investment going in. And I think it will be... In line with the growth of EVIS. The bigger constraint might be batteries”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“I think besides this proprietary network, which is quite established already worldwide now in Europe, US mostly, the rest is really industry-wide usable. There's still, let's say, when it comes to billing or charging, there are different standards, different price tags. But here in Europe, you can use every pole which is not Tesla and I really think it's positive move from Tesla to consider opening up the network, but that always has a Tesla has to decide on that, Tesla has to decide on that. My perception is that the charging network actually is growing very, very fast, at least in Europe. I drove electric cars basically the whole year through in 2021. I've done about 15,000 kilometers. I was to Italy yesterday. I come back from.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Is that fast enough? In some countries, we are already ahead of Tesla. I think that's fast enough because it has to go along with the growth of the fleet. But you're absolutely right, we can't do all the investment out of our cash flows. Now we are partnering and we are also looking for in some areas, for instance, batteries, not batteries are a much bigger concern for me because investment there is still bigger than in charging where we will even consider IPOs allowing third parties to participate in the growth because there will be a lot of growth in that area of EVs charging networks, batteries. I'm sure that we will find investors to participate. But we can't finance all of the necessary investment out of our cash flows.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Not supplying the energy, dealing with energy. We get much more complex because the prices for electric energy are fluctuating. You can buy at high places, you have to be able to buffer and cars will provide a huge opportunity to be able to contribute to net stability, not to the electric net stability because you basically you can load the car when there is a surplus. We will experience times where you get your refueling for free because there's just so much And we want to participate. We want to participate. And yes, America was not entirely voluntary at the beginning, but at the end, I think it was the baseline for one of our really also strategic approaches into EV business.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“And it's showing that it can be done. And also, what we see is that there is a huge opportunity in charging. Just a few days before Christmas, I had the opportunity to open a charging hub for Audi, which is kind of premium charging in a location close to Nuremberg. And this will be a wonderful experience. Now you have fast charging, you get there with your Audi app, you get there, you plug in your car, and then you have kind of a lounge atmosphere where you can wash your hands, you can have a drink, you can do your emails, you have real land. This will be part of the mobility experience will be charging. And there will be premium experience over, let's say, just covering the areas. That is why we think charging will play a major role. We think also what today is with the petrol companies.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Have been founding charging networks in joint ventures in Italy, in Spain. We are invested in Ionity, which is a fast-charging network across Europe. We have invested in a fast-charging network in China because we think it's going to be necessary for electrification. We need to invest. By the way, our American competitor is showing that?”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“I have to say from all the panelists we received in America, I most liked from the beginning this idea of a charging network. Now, because I always found that the idea of paving the way for our electric cars or even making electric cars viable in America would be at the end an asset for us. So I really like that. But still, this was big investment. It's not going to pay off too soon. But over time, we are noticing that charging will be a business model. There's a lot of investment going into charging now. All the petrol companies, the biggest charging network company currently is Shell. So that means there's a lot of business potential in charging. We see that also our incomes are really gradually improving because the usage is getting higher and with every electric car we're selling it's getting better. And we're not doing it only in America.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“In Europe, it's already we have market introduction in the first quarter, and then it should come mid-year to the customers.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“In America, but we announced it because it's hitting the ground here in Europe. That is, and I tell you the background a little bit when I pushed very hard for this project. I have to say I really fought for this project. This was very important for me. And there was quite a lot of skepticism around. And we took the decision in 2015. And there was a lot of skepticism whether EVs would work at all and whether this would be a good investment or a bad investment. And I have to say, and you have to imagine this was still Trump administration. Our American colleagues have been very conservative on their volume perspectives. By the time. And that led to a situation that we took the decision to bring the car to America very late. And that required some modifications for the local American specs. And so this is why the car is coming too late to America.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“You can't say the American team has to decide on that. That's premature because the car will only come, I think, next year to America. So it's not yet decided as the car will have newest features, a lot of range, it will not be as cheap as the first microbus.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Is waiting for this product. Also, in Europe, quite many are looking forward, and I think Tim has done a great job. I think the car will perform very nicely, very modern car, but still... Awaking also memories of freedom of probably of a very liberal time.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Much bigger than the existing T7 bus, which we are offering, on the platform of an This was a dream of mine, not to bring back the initial bully because this is probably the most Emotional car the world has ever seen. In its car really impacted the world, it came at the right time in these hippie areas of the 60s. This was really very much used. It's a cultural item. It creates so much positive awareness even in the United States, but worldwide, not in China because they didn't experience it. But in the rest of the world, it's so nicely perceived and it's so much tied into a positive memories of Volkswagen that it's really an asset. So it was really a wish from my first day with Volkswagen to bring back to life this car. And only electrification gave us a chance. There were probably six or seven intents to bring back this initial icon, iconic carves of the first microbuses. But the opportunity came with electrification. And then we did it. We pushed it through and it's now coming and I'm really excited. And I think also America.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Definitely. No, definitely. I would say the electrification gave us the chance to bring back the microbes because the microbus in its historic time frame was quite unique because it offered a huge amount of space on a very reduced platform size. So a relatively small car but with huge interior. And you know as car technology developed over time the cars have become much more complex, engine technology much more complex, much more bulky, much more voluminous. The car lost over time its initial room efficiency. Room efficiency means you have loads of room to move, to sit, to work, to rest, to camp on a reduced size of a platform. And only electrification and the MEP brought back this opportunity. Now we have in this new microbus, we have the interior size of a much bigger.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Help us, not because bundling all the synergies in the group is 10 million cars, respectively, every year out there. We have a chance for the right economy scale, being open also to third parties to deliver. We will not close also the windows for Google because we are working in some car lines with Google support. We have good relationship, but Google knows that at least we will try and try very, very hard. We will try very hard to keep independent.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“I can't compare this forward, but we think we are not too bad in it now. We are, if I compare our routing capabilities, which we have currently in the car based on here map data and our own routines, in some cases our routing is better and more accurate and leads to faster to the target than Google can do if it comes to the how, for instance, charging infrastructure data, we absolutely can compete. We believe that it's necessary to keep control on this domain of user interaction. Because at the end now it makes a difference if the user talks to Google or talks to Audi or Porsche. It makes a difference and we can deliver a specific service. And the carrier will”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“It's very difficult to predict that currently we are very open, we are a platform, we are sharing with Ford because we think that the economies of scale, we can generate are beneficial for both companies. Ford in Europe is using our MEB platform and that applies for hardware and software. So we are very open. There won't be too many really self-sufficient software stacks in the world because it will be really expensive to maintain, to make sure that they are up to date worldwide. We are Currently considering to share. We would be open to partnering as long as we don't get slower. But we are prepared. So if you say Apple or Google, you would say currently we are running the Google way. We are open to third parties to use our technology.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Sell difficult to say, first thing will be probably the fleets we are running, no, first probably own fleets together with Argo AI 25, 26 we should get started, no still with the steering wheel for getting the car in certain locations back, but towards 30 we should be able to sell cars without a steering wheel for transport services. Now for the let's say for private use most of those cars probably still would have a steering wheel in case of let's say heavy weather conditions or let's say you go into a very remote area where the car is not able to handle it.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Someone has to run the fleets, someone has to build the cars, and someone has to do the autonomous driver, which is currently Argo AI. And this is why we have a stake in Argo AI, because at the end we also want ownership, at least shared ownership in this area. On the other side, yes, we are for sure. We also have suppliers there. We are working with Bosch, with mobile eye in the other area, but we want to become able to be able to really drive the car because we think the big differentiator is and the big step change in the industry is, are you able to take over the responsibility for driving the car? That makes a big difference.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“At one stage, you think about a completely autonomous car which is right from the start able to handle an area. On the other hand, you think about a car which is driving at higher speeds in a less complex area, being able to take over from a driver for a certain period of time. And that leads to different approaches, to different sensor concepts, to different algorithms, and to different AI learning tasks. And that is why we are pushing both. And in both areas, we clearly have the target sooner or later to be able to drive the car because we think that if you think those robo shuttles, you would have probably three different business layers. No one is platform, so the customer interface, so you have to book the car, you have to pay for the car. This is platform level.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“And this goes like shuttle services, limited areas, relatively slow speeds, and the typical ODD which is learned and programmed, and then it goes area by area city by city. And the other way we are pushing is private mobility, where we have the Audi team and carrier team working because we think that autonomous driving will not only have this area of robotaxis, but also private cars will become autonomous over time. Step by step, first probably being able to drive level three, level four on open highways, German autobahns, and then getting into more complex areas. But this will happen at the same time. It's two different technologies. Comments, but not too many. So some of our approaches are sharing the computer.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Actually, we treat Argonaut as a supplier. We own a major stake in Argo. So we have a lot of equity in and we have a very close and trustful relation with the management team there. And we provide all know-how and knowledge, integration into the car, we run the fleets. And in the end, it's not about software. It's about good integration between the right sensor setup than the right computer hardware to make all the perception, the planning, and then take the right decisions to run the car safely. At the end, our aim is to be able to drive a car. And we have two areas. One is where we are pushing with Argo in this area of robotaxis.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Combined. We will remain a hardware company because you know, I think you need excellent manufacturing skills also in the future designs, quality, finish quality. You need direct customer contact. So we will remain part of that. Software will be decisive for the differentiation and for gaining the economies of scale. So we will become a software company as well, being able to talk to the customer and deliver day by day and day in and out. And we will become a service company because mobility will change. This pay by use sharing fleets, shared fleets, mobility services, autonomous will change that quite considerably, that people will not own a car anymore but only use a car and we will be part of that game. So we will become definitely also Of those companies. So we will remain a bit complex. But a lot more vertically integrated.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“It's reasonable, yeah? It's reasonable, but still they are making a lot of margin on the hardware, but people are being prepared to pay that margin on the hardware because of the services they get. So I think this logic will also apply to our industry. People will not buy any more cars which will fade out soon and lose residual value fast and not being a state of the art. So this will be a decisive customer criteria. And at the end it's about competition. It's about competition. And if we can deliver better service, better cars, better customer experience, the customers are prepared to pay for mobility. We see that mobility has a value and customers are probably even prepared to spend more on mobility because they love mobility. They love cars, they love individual mobility.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“I think we have that revenue in mind for sure now as well, and there will be revenues because customers will be prepared for some features they didn't buy at the start probably after a few years or after a few months even they would consider to take another option, another software feature and the customers would be prepared to pay or even the monthly fee or as a one-time expenditure. But I think we underestimate that the big difference is really that we keep the residual value of the car higher, we keep the car fresher and we get a better customer experience. You know when Apple started their smartphone business the income from their services from the apps was very very low now it's it's”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“It's really exciting. It's not about only additional business opportunities, but it's about additional satisfaction, get close to the customer, understand the customer better, not get closer to the need of the customer. So this will change our business model.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Not only for instance, I've sorry to interrupt, but what was for me really right before Christmas I had a chance to drive the next generation of the software which we are going to deploy to some of our ID cars, to the lineup, no? And it's a huge improve in the driver assistance functionality. I would say it's really in part, even in Europe, I would say it's better performing than some of our American competitors. This experience being able to improve the car in the user experience in the hand of the customer, this is such a new thing because normally we would have worked until launch and trying to prepare and probably then a model year update and then another three years and then forget the car and think about the next. This idea now of getting the car better in the hands of the customer”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“And you can imagine that with updates, upgrades, knowing about the car, the battery status, you can improve your residuals of the car quite considerably, knowing what you're probably in the second car sale which extras you need and you could provide for some features. You can keep the car fresh. So there is my perception is my feeling is that there are much more opportunities in that change than risks. There is a risk because you have to acquire new skills, you have to learn to talk to the customer, which is a big challenge for us, a big challenge for us. You have to learn to deliver good working software updates. It keeps the customer happy, have some surprises for the customer. But I think it's a very, very healthy learning. And if we take the opportunities and we see there's a chance, there's more upside than downside.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Allows, for instance, also for us a very critical figure in our business model is as we are financing quite many of our cars, not about 60, 70 percent in some markets in the US it's 90% residual values. So residuals are for us more important than retail prices.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Make a deal on spare parts, tires, and what we experience that over time people walk away from our retail outlets, from our stores and go then to third parties to, let's say, substitute some of the spare parts or buy new tires. We have a new chance now getting in direct contact with the customer, which is totally new for us. And I have to say it's kind of quite violent experience because we knew that we had customers, but we didn't know them and now we're getting to know them. We're getting to know them. We get to know their preferences, their anger, what they love in the cars. We get a much better customer understanding. But what we also get is access to the customer. We can talk directly to him. And that allows us probably over time to do better business with the customer, to deliver better service for the customer. Over time.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“Think it's probably a bit premature to say it's not going to happen because the pay per use is really taking a lot of space in any other businesses. And also we see that sharing is gaining momentum. This is basically also why we bought a car rental company because we think this business model of sharing usage will increase. No, and it will increase for us. It will not substitute ownership, at least not in the next 10 years or so, but it will grow a lot and this allows for additional revenue streams. I fully agree we have to run the car, we have to provide services, but you have to see that this allows us also for additional sources of income. Imagine so far as a company we did not have access to a customer. The customer access was exclusively with our retail network, basically. And they could make a deal or couldn't.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“With a software car, I buy the car from you. My expectation as a customer is that you are going to continuously provide me new updates to the software, to the user experience, new features, that you're going to run a cloud service that delivers back-end features or mapping support or whatever it is. You're going to run a radio network, right? You're going to partner with a cell carrier. Those are all costs now that VW has to carry just for me to drive the car that I already bought. Where is the revenue that supports those costs? Because I don't think people want subscription fees just to operate their cars. Or at least I haven't seen that market develop yet.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT
“I probably agree with you there. Let me ask you about software, right? So VW is very good at making cars and manufacturing them at scale and making sure they're reliable. You sell a gas car. Your cost for that car to maintain it over time as VW is zero. And if the customer has a problem with a traditional gas car, they're on the hook for repairing it or buying new tires or whatever. And that actually can generate some profit for VW and Steeler network over time.”
2022-01-18 · Decoder with Nilay Patel · Can CEO Herbert Diess reinvent Volkswagen with EVs and software? · IDENTIFIED FROM THE TRANSCRIPT