Volkswagen mulls factory plans amid software issues: reports

BERLIN

German auto giant was considering pulling plans for a new factory at its Wolfsburg HQ as software issues threatened to delay new models, according to local media reports Thursday.     

As recently as March, Volkswagen announced plans to invest two billion euros ($2.1 billion) into the plant to house “Trinity” vehicles, the centre point of its new all-electric fleet.     

But problems with software development for the new model could push back the delivery by “two to three years” from the 2026 target, according to German financial daily Handelsblatt.

A delay could make a purpose-built factory in Wolfsburg redundant, giving time for the current factory to be retooled, the paper reported.     

“We are currently taking the opportunity to look at all projects and investments and checking their viability,” CEO Oliver Blume wrote in a letter to Volkswagen employees after the media reports.

“First, we will come to decisions together on software,” followed by the “product strategy” and the organisation of its production facilities, Blume wrote in the letter with VW brand boss Thomas Schaefer.

It was however “too soon to make any concrete statements” about the conclusions of the review, the pair said.

The reassessment of Volkswagen’s electric strategy follows Blume’s arrival as CEO in September and marks a break with former boss Herbert Diess.

After his arrival in 2018, Diess pushed the legacy automaker into embracing electric vehicles to turn the page on the “dieselgate” emissions-cheating scandal.

But his hard-driving style and praise for U.S. rival Tesla, which opened its own purpose-built factory on the outskirts of Berlin earlier this year, ruffled feathers internally.

The Austrian finally lost the confidence of Volkswagen’s main shareholders -- the Porsche-Piech family - as problems mounted in the group’s software division.