Volkswagen has just ‘one shot’ to survive in the digital era game: CEO

Diess’s warning comes as the car industry is grappling with tough new EU emissions rules that came into force in 2020

Volkswagen needs to make urgent changes to become more of a tech company as the industry enters the digital era, CEO Herbert Diess said Thursday, warning that the German car giant had just “one shot” at staying in the game. “The time of the classic car manufacturer is over,” Diess said in a speech to senior executives, as the industry undergoes “radical transformation” to make cars greener and smarter than ever before.

“Volkswagen‘s future lies in becoming a digital technology company,” Diess said. He singled out US tech firm and electric car pioneer Tesla as an example of the kind of fierce and unorthodox competition the company was up against. Diess’s warning comes as the car industry is grappling with tough new EU emissions rules that came into force in 2020, pushing automakers to accelerate their costly switch to hybrid and electric cars.

At the same time, companies are pouring billions of euros (dollars) into new technologies like self-driving and internet-connected “smart” cars — just as carmakers are smarting from weaker global demand. To master the challenges, Diess said the group needed “a shared understanding of the radical nature of the changes” and be prepared to “slaughter holy cows” — a possible nod to future cost cuts.