The executive called for an immediate freeze on spending, saying that the “roof is on fire”.
This is the result of a downturn in EV sales, especially in China.
Volkswagen wants to become the world’s leading EV manufacturer while still offering combustion-powered models in certain markets.
Things aren’t going well at Volkswagen, judging by the CEO’s recent address to over 2,000 of the automaker’s senior managers.
Indeed, the executive called for the company to freeze spending immediately in order to limit losses.
The CEO even went as far as saying that “the roof is on fire” due to large investments that are being made in both electric and combustion technologies.
This is because the company wants to become the world leader in terms of electric vehicle sales in the next few years, while also continuing to offer models powered by combustion engines in some markets.
This means that Volkswagen not only has to develop new technologies, but it also has to keep making advancements in terms of gasoline engines due to ever-strengthening emissions regulations.
In addition, sales of the automaker’s electric vehicles have taken a downturn in China and local competition has forced it to lower the price of its models in this very important market.
Furthermore, sources say that a portion of the German factory where the ID.4 electric crossover is made has been unused for a few months already due to a lack of demand.
In order to rectify this situation which a few of the company’s executives qualify as “critical”, Volkswagen will launch a number of “performance programs” that will aim to make its structures simpler and more agile.
If these changes are as effective as planned, they could save the company around 10 billion Euros over the next three years.
Volkswagen also hopes that new models it is about to launch around the world such as the ID. Buzz in North America and the next-generation Tiguan will help it return to financial stability in the next few years.