Former VW boss Herbert Diess rejects union criticism of hybrid car strategy

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Former Volkswagen chief Herbert Diess has pushed back against criticism over his strategy on hybrid vehicles during his tenure at Europe’s largest carmaker, arguing that public backing for the technology was too weak in Germany.

Daniela Cavallo, chair of VW’s works council, on Monday accused the former CEO, who departed in 2022, of having left the company “largely . . . empty-handed” when it came to hybrids — a technology that has grown in popularity as enthusiasm for electric cars has slowed.

“That’s not true,” Diess told the Financial Times, adding that the ailing group had an “excellent portfolio” of plug-in hybrids, including models of the Tiguan, Passat and Golf.

Of the 4mn-plus cars sold by VW Group in the first half of this year, 3 per cent were plug-in hybrids, a figure that the company said had grown by nearly a fifth from the same period last year.

Among the various hybrid technologies, carmakers are increasing investment in plug-ins, which can run for dozens of miles on electric power alone and can be charged at home.

But these vehicles remain relatively expensive since they are rely on a large battery, and sales remain bigger for full hybrids — which run on a smaller battery and are cheaper. Volkswagen sells mainly plug-in hybrids.

Plug-ins accounted for only 1 per cent of the 5mn vehicles sold by Toyota, the pioneer in hybrid technology, during the first six months of the year. But when combined with full hybrids, the segment accounted for 41 per cent for the world’s largest carmaker.

Diess said further investment would not have been possible under his tenure as the dual-power technology had at the time been “discredited in Germany by public discussion in the media and [by] some politicians”.

But he backed hybrid technology, calling it a “missed opportunity” and said it was a “better alternative than EVs both economically and ecologically”, as the extra battery capacity needed for longer-range electric vehicles was more costly and carried a larger product carbon footprint.

The former car executive, who has since become the chair of Munich-based chipmaker Infineon, said that lower-than-expected sales of electric vehicles in Germany could also be attributed to the technology not having been wholeheartedly endorsed by Berlin.

“The mixed messages around EVs really are confusing German customers,” he said, adding that the German government’s demand in 2023 that EU plans to ban combustion engines by 2035 include an exemption for “green” fuels produced using electricity from renewable hydrogen and other gases, had only served to dent demand for EVs.

Diess also criticised Berlin’s sudden withdrawal of EV subsidies at the end of last year, as well as patchy progress on the buildout of a charging network, adding that cash support and infrastructure investment had been “on and off”.

Cavallo’s remarks marked the onset of a battle at VW after Diess’s successor, Oliver Blume, this week endorsed plans to lay off workers — reneging on a three-decade old job security guarantee — and raised the unprecedented prospect of closing some German plants.

Diess found himself ousted within months of making a similar suggestion three years ago, following clashes with Cavallo. The VW’s works council controls half the seats on the company’s supervisory board and often relies on the backing of the state government of Lower Saxony — which holds 20 per cent of the voting rights in the carmaker and is a strong advocate for employment in the region.