Volkswagen CEO: smart cars, not electric cars, are game-changers

MUNICH, Sept. 5 (Reuters) – Volkswagen director Herbert Diess (VOWG_p.DE) said on Sunday that self-driving cars, not electric vehicles, were the “real game changer” for the auto industry, which is facing the end of combustion engines in Europe by 2035.

Diess’s comments signal the pace at which the 62-year-old is trying to transform Europe’s largest automaker by essentially saying that the shift to battery-electric vehicles (EVs), which has yet to be supported by actual sales, has been sealed.

“Autonomous driving is really going to change our industry like never before,” Diess said in Munich ahead of the official opening of the IAA motor show, adding that the switch to electrified cars was “a bit easy” in comparison.

“The real gamechanger is software and autonomous driving.”

Diess spoke as environmental pressure on the auto sector intensifies, with the European Commission proposing in July an effective ban on the sale of new gasoline and diesel cars from 2035. read more

On Friday, Greenpeace and German environmental NGO Deutsche Umwelthilfe (DUH) said they would take legal action against German automakers, including Volkswagen, if they do not step up their climate change policies. Read more

Diess, who was confronted with Greenpeace activists before entering the site on Sunday, is therefore not just aiming to overtake Tesla (TSLA.O) and make Volkswagen the world’s largest seller of electric vehicles by 2025.

It also wants to make software services for autonomous cars a key pillar of the group’s future business, which is why Volkswagen has acquired autonomous driving software startup Argo AI, competitor of Alphabet Inc’s Waymo (GOOGL.O). .

Traditional automakers and tech companies have invested billions of dollars over the past decade to realize the vision of driverless cars, but axis robots remain elusive due to technical and regulatory hurdles that require continued human presence.

Volkswagen projects 1.2 trillion euros ($ 1.43 trillion) in automotive software sales by 2030, accounting for around a quarter of the global mobility market, which is expected to more than double to 5 trillion euros accordingly.

“By 2030 … about 85% of our business is cars, private cars, private and shared rental cars. And about 15% of mobility should be shuttles, mobility as a service,” Diess said.

This ties in with the group’s recent decision to lead a consortium in the acquisition of car rental company Europcar (EUCAR.PA), a gamble on potentially lucrative mobility services that have yet to come true.

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Reporting by Christoph Steitz and Jan Schwartz Editing by Andrew Cawthorne, Sandra Maler and Marguerita Choy

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