Aseuropean governments combat a resurgent pandemic, the chief professional of volkswagen, the globes largest carmaker, is fighting his own fight.

Since taking the top job in 2018, herbert diess was driven by a fear the german team will undoubtedly be left out once the era of the burning motor provides way to compared to the electric automobile.

Quite a few differentiators, our understanding, our actual capabilities, will not be as crucial anymore, mr diess informed the ft in an interview at vws sprawling headquarters in wolfsburg.

This is exactly what took place to agfa or kodak he added, talking about the photography companies upended because of the digital transformation. they knew what was coming, nonetheless they nonetheless couldnt change.

Volkswagen has recently pledged to invest 33bn on its electric automobile business, an investment mr diess hopes at some point triple the companys marketplace capitalisation to 200bn and secure its future as a heavyweight that will compete keenly against pioneers eg tesla.

Club chart of global electric automobile sales, year to sep  (000 units)* showing vw is designed to take tesla

But as coronavirus crisis threatens to cause even more pain regarding automobile industry, pointing toward complacency of loves of kodak is almost certainly not adequate to sway everybody inside and outside vw that a profitable electric future is his grasp.

After shutdowns at battery plants come early july delayed deliveries of vws first mass-market electric vehicle, the id.3, and audis e-tron, the team is within risk of missing hard eu emissions objectives in 2020, and could be fined vast sums of euros.

Unions also have bristled in the expense cuts necessary to pay for the change, while investors be concerned that recent missteps have weakened the 62-year-olds leverage in a highly political organization.

It is a predicament that also attracted sympathy from tesla founder elon musk, whom tweeted final month that mr diess was at a tough position with so many constituencies to please.

Several of mr diess problems are self-inflicted. in summer, the bavarian had been forced to apologise to vws supervisory board, which include workers representatives, after accusing people in being in charge of damaging leakages about computer software problems using the brand new golf model.

He subsequently relinquished control over the vw brand name, the greatest of teams 12 marques, a position he previously held since 2015, as he joined the business from competing bmw.

In the office overlooking the wolfsburg plant, mr diess recognized the summers boardroom crisis had led to scepticism about their capability to transform vw.

We need to prove that governance is working he included. is-it still perseverance to persuade all stakeholders; to take all of them along? yes, because its complex. its really unionised. you can find various interests within the team.

He in addition dismissed suggestions that difficulties may flare as vws vehicle subsidiary, guy, plans to axe 9,500 roles to invest in a development into electric technology. once the products administration tore up an understanding with unions in september, the top of vws works council, bernd osterloh,warned the organization is well advised not to connect restructuring because of the spectre of jobless.

After the turbulence associated with the early summer, something of a truce was attained.

It appears [mr diess] stumbled on terms with how things are operate here at vw, stated one close to the works council, just who included the executive is much more communicative with union employers.

But just because relations using the unions improve further, it'll do-little inside short-term to revive vws share cost, that has lagged behind european rivals this season.

Vw destroyed some speed within the last few few months, said ingo speich, a profile supervisor at institutional investor deka, and was engaged in an electrical fight.

Line chart of share rates and list rebased  showing vw has actually lost speed against competitors recently

Mr diess said investors should wait a few months before delivering their particular decision. the proof point would be towards end of this 12 months and into next year when individuals notice [the change is] doing work, we can sell the cars, the need can there be, that people can deliver on our promises he stated.

And vw is pulling in front of standard competitors when you look at the electrification competition. the group recently overtook the renault-nissan alliance in order to become the biggest vendor of electrified cars in european countries, and it is on program to become the biggest in the world within a few years.

After a sluggish start, additionally it is approaching full convenience of creation of the id.3 and it is about to start several more battery designs, including its first dedicated electric suv, the id.4.

Greater issue for mr diess, but is make certain that a power future for vw can also be a financially rewarding one.

The danger is the fact that electric automobiles, which contain far fewer components than combustion motor designs, will likely to be commoditised. it's a scenario mr diess hopes to fight by owning the important buyer information produced by vehicles which can be more and more computerized and connected to the web.

Modern vehicles contain much more outlines of code than a smartphone, but volkswagen hinges on vendors for 90 % of its designs pc software. unlike competitors eg daimler, which includes partnered with technology giant nvidia, vw is ploughing 7bn into building a subsidiary with 5,000 staff, tasked with increasing the level of proprietary software in vw cars six-fold.

Column chart of pre-tax earnings (bn) showing vw earnings have actually gone back to the black

Yet contending with silicon valley leaders, whose cash reserves alone tend to be larger than vws whole marketplace price, is certainly not easy.

We now have the possibility, because the vehicle is really complex and google cant do a car these days, mr diess said. elon [musk] makes a car or truck, but also with some limits however. can we get to his degree? yes, i do believe so. most folks employed by west coast tech companies tend to be europeans.

Following their electric and software ambitions is not the fastest approach to the 200bn valuation mr diess is aiming for. experts alternatively recommend drifting an integral part of lucrative brands such as porsche.

Vw has actually these types of important possessions, if they were to restructure to a holding model, they could raise a great deal capital and employ it to innovate at such a great pace, said arndt ellinghorst, an analyst at bernstein.

But mr diess is aware that such decisions will have to win the approval of the porsche-pich household, just who own above 53 per cent of vws voting money and continue to be wary of restructuring the companys portfolio.

In annually switched ugly because of the pandemic, the vw boss also knows he has to remain focused on keeping the organization, whose pre-tax earnings have actually fallen 85 per cent thus far this year, when you look at the black colored.

When we will keep the economic climate operating and plants running, we have to nevertheless be able to deliver a great last quarter, he stated. amid the crisis, he included, vw is making progress in restructuring its interior offer stores, and lowering costs.

Could it be fast adequate the capital areas? he asked aloud, referring to the electric battle vw is operating. not likely, but, its quite quick for volkswagen.