THE recent ousting of Herbert Diess as the CEO of Volkswagen and the appointment of Porsche boss Oliver Blume has all the hallmarks of further fallout that the car industry is having as it comes to terms with new bans imposed by EU and other governments on the sale of ICE cars from 2030.

The actual reality of total bans on the sale of ICE vehicles by 2030 – only eight years away – is starting to worry management as they imagine what their factories and supplier operations will look like in 2031.

That deadline is getting horribly close when you are talking about wiping out the majority of your current industrial base and replacing it with all-new systems with which existing car industry managers and employees have never dealt before.

The stress is showing.

Sterlantis and Renault bosses are now making noises that these targets could seriously erode out their businesses in Europe.

Senior management of other car makers are increasingly making asides to the media that, while stressing their green credentials, the new deadline will undermine the cash cow base load of ICE car sales that are needed to fund their way forward into an EV world.      

Volvo, on the other hand, recently left the main OEM lobby group in Europe because it was impatient that the organisation was still holding out for a future for ICE vehicles. Volvo is committed to a complete pivot to EVs as is its Chinese parent company, Geely.

Volvo, Stellantis leave OEM group: Click here

At Volkswagen, Mr Diess had committed to an all-electric future and it began to dawn on the VW board – which contains car union representatives – that this was an all-or-nothing strategy that could ruin the company if VW could not make the transition to EVs in sufficient quantities to pay all the bills the ICE cars once did in support of some 120,000 jobs in Germany (200,000 worldwide).   

Mr Blume, on the other hand, while committed to electric versions of Porsche, is additionally a big fan of synthetic eFuels which can power current engines and have the potential of protecting the huge sunk costs that reside in the manufacture of ICE drivelines. 

Mr Blume, in discussions with the EU regulators, has managed to get the rule makers to leave the door open for eFuels as part of the mix in the world beyond 2030. 

eFuel uses an electrolysis process to crack water into hydrogen and oxygen and run those hydrogen molecules through a process developed by Exxon that turns it into gasoline.

The electricity to power the process would come from wind farms where intermittency from the wind is not as critical to the fuel production 24/7 as it is to powering a grid.

Porsche says that using an eFuel in an ICE car would achieve an 85 per cent reduction in CO2.

Porsche says that reduction is the same as that achieved by an EV when you take into account the pollution from the upstream generation of power for an EV.

Porsche has already begun a testing program using 130,000 litres of specially-produced eFuel.

Mr Diess, a former BMW manager who was intent on turning VW into a world-leading maker of electric cars, had a scratchy management style and was often at odds with the union representatives who shared roughly half the boardroom table with him.

In addition to the stress flowing from the total commitment of Mr Diess to an all-EV future, the board had also become impatient with slow progress on the CARIAD software platform VW was building internally to run all of its electric cars in a one-size-fits-all approach. 

According to the Wall Street Journal the missed deadlines in completing the software have delayed model launches at Audi, Bentley and Porsche and, according to reports, some models have been delayed by years. This was preying on the minds of the Porsche-Piech family when the decision was made to bring in Mr Blume – a VW group lifer.

Mr Diess’ insistence that the software should be applied across all models in the group also caused problems within the various brands which argued they needed specific solutions because they had unique competitors at different levels of the market that required their cars to have specific features not available in Mr Diess’ software. 

One of Mr Blume’s first jobs will be to assess the progress made on the electric vehicle software platform and decide whether it should proceed in-house or follow the lead of some other car makers and call in Alphabet (Google) or Apple to plug in their auto solutions platform. 

The Wall Street Journal said that Mr Blume had met with Apple in March. 

Mr Blume, 57, was appointed CEO of Porsche in 2015 and remains in that post while talking on the wider role at VW.  He joined the VW Group as a trainee in 1994 and has worked for Audi, SEAT, VW and Porsche since that time.

By John Mellor