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Why Volkswagen CEO Herbert Diess Was Forced Out

Major software delays and rumored personal issues led to Diess's downfall at VW.

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It was announced last week that Volkswagen CEO Herbert Diess would step down from his role, to be replaced by current Porsche CEO Oliver Blume. At first, it wasn’t immediately clear what led to Diess’s sudden ouster, but a new report from Bloomberg sheds light on a possible reason. That being said, it may not be the whole story, but we’ll get to that.

Bloomberg suggests Diess was removed after severe software-development delays and setbacks disrupted the scheduled launches of a handful of new Porsches, Bentleys and Audis. Adding insult to injury, buggy software is what originally delayed the Volkswagen ID range of electric cars.


Diess also was not exactly beloved among Volkswagen brass, mostly due to his rather tough leadership style. As Bloomberg reports:

In his push to transform the company into an electric-vehicle leader, he repeatedly clashed with labor leaders by warning VW was losing out to Tesla and needed to cut thousands of jobs. But failures at the carmaker’s software unit Cariad ultimately eroded Diess’s support from the powerful Porsche and Piech family that calls the shots.

Back in December, VW overhauled its management board, stripping Diess of some responsibilities while tasking him to turn around Cariad. While there’s been a lot of re-arranging since then, Diess didn’t manage to make the issues go away.


These issues with Cariad delayed the rollout of the electric Porsche Macan, which is bad news given that Porsche is looking to offer an IPO later this year. Audi’s slate of new electric vehicles was also pushed back by two years, to 2027. Meanwhile, Bentley’s plan to go all-electric by the end of the decade is on life support. So, all around there are some major issues brewing over in Germany.

While all of these factors may have contributed to Diess’s downfall at the Volkswagen Audi Group, there’s a slightly more scandalous rumor about the events surrounding his sudden dismissal.

We likely won’t ever know everything that was said in the meeting that ended Diess’s tenure as CEO of Volkswagen. In a somewhat ironic twist, it was just this past November when we reported that Diess had survived a vote-of-confidence decision by the board.

Diess isn’t going away tomorrow. He will stay at the helm of VW until September 1st, when his successor, Blume, will combine his new role with his current position at Porsche.


Diess was at the forefront of the EV revolution at Volkswagen. His spending plan called for investing $91 billion in software and EVs over the next half decade, according to Bloomberg. Just one year ago, the automaker committed to hiring 10,000 people just in software operations.

We don’t exactly know what’ll come next for Diess and Volkswagen, but a new era is about to begin for both.