Thursday, September 1, 2022

VW's software woes

The Oliver Blume era begins.

Welcome to the Hyperdrive daily briefing, decoding the revolution reshaping the auto world, from EVs to self-driving cars and beyond. You can read the full story featured in today's newsletter on the web here.

News Briefs

Regime Change at Volkswagen

Hello! Monica Raymunt here. I cover Volkswagen from Berlin and took the lead writing our feature story published this morning on the software issues that brought down Herbert Diess and top the to-do list for Oliver Blume, who starts as CEO today.

Diess's master plan for beating Tesla was to replace calloused factory hands with the nimble fingertips of 10,000 software workers who would transform VW into a tech player.

Instead, after two years of VW electric car customers angrily stabbing at screens and board members at the world's second-largest automaker pointing fingers, Diess was forced out.

Blume is all car guy rather than tech guru and got the gig by being a team player and pragmatist. The probability that he'll make dramatic changes early in his tenure is low, and that risks prolonging the problems plaguing VW customers.

Oliver Blume at Porsche's unveiling of the all-electric Taycan in 2019.  Photographer: Krisztian Bocsi/Bloomberg

Drivers' car displays are seizing up and even going blank. For owners to gain the ability to get over-the-air updates of certain features — some of which may be safety-critical — VW is requiring many to drop their EV off for a day at the dealership. Infotainment systems reliant on software described as incomplete are making their way to more models, threatening VW's position in sales and quality rankings.

"It's the disease that's spreading," Jake Fisher, senior director of auto testing at Consumer Reports, told my colleague Keith Naughton in Detroit.

Fisher was one of the more than a dozen testers or owners of VW's ID series EVs and Tesla models in seven countries whom Bloomberg spoke with to get a sense of just how big a technological gap Blume has to close. ID drivers complained about their cars suddenly braking because of a traffic sign detection system so buggy, they tend to just deactivate it; a smartphone app that's glitchy and lacking features; and challenges syncing their phone with their EV either wirelessly or with a cord.

"I hadn't expected to buy a car that was unfinished," said Christopher Bergsten, a 31-year-old in Linkoping, Sweden, who sold his ID.4 sport utility vehicle after less than six months. "I expected way more."

Blume, an engineer with VW pedigree who led Porsche during the launch of its first electric car, may eventually make some significant changes.

Whereas Diess had emphasized the need for VW to go it alone building its own software platforms for its mass-market and premium brands, Blume has been more open to working with nimble software partners that promise faster solutions. Porsche has cooperated closely with Apple, which mentioned the brand in June as being among the carmakers that will integrate a new version of its CarPlay system.

During a global top management conference on Thursday, Blume praised the job Diess did setting a strategy for VW and said it's now time to deliver. The automaker will streamline its group board of management, with the CEO focusing on strategy, quality, design and Cariad.

"It's normal for the build-up of a company to be an onerous process," Blume said of VW's software unit Cariad in an interview posted to the carmaker's website. "We will assess everything with an open mind and develop a swift implementation plan."

Apple's next-generation CarPlay interface.  Source: Apple

For the time being, some 200,000 ID drivers are having to book drop-offs at dealerships for a hardware fix that will enable over-the-air updates to their infotainment and battery-management systems. VW needs to replace the 12-volt battery that acts as a secondary power source to the lithium-ion pack underneath the vehicle. There's risk the current battery won't have enough juice to withstand downloads lasting several hours.

Misgivings about VW's software lagging behind led Gao Zhao, a finance manager in Shanghai, to spurn an ID.6 he's tested in favor of the Model 3 he's owned for two years. He believes the German automaker is trailing not only Tesla, but also Chinese upstarts.

"It's just like when Nokia attempted to launch a smartphone system to compete with Apple," Gao said. "It's just quite awkward."

Before You Go

The Hongguang Mini Cabrio.  Photographer: Wuling Motors/Wuling Motors

One of General Motors's China joint ventures is launching a two-seat convertible version of its hot-selling electric minicar. For the chance to get behind the wheel of SAIC-GM-Wuling Automobile's Hongguang Mini Cabrio, consumers will have to enter a lottery. Winners will be announced later this month, Wuling Motors's head of branding and marketing said.

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