And something different from economic prespective. Whats more important to German people. A Volkswagen to be built in Germany. Or sending it to Slovakia and keep the "company" alive. And at what point its to be called a German Car Company itself. Just to keep it alive, keep sending its parts to everywhere else. When eventually it would have nothing to do with Germany, as cost will always go on increasing,it will sell and send itself away totally. Why would it be important to keep it alive that way.
And i have to say,Your article is nothing but excellent in pointing the issues of vw.
In the Euro STOXX, Nokia replaced VW in the euro STOXX 50 index, that is true.
What isn’t true is that this means Nokia is worth more than VW.
This is the difference between market capitalisation and total value of corporate assets.
Market capitalisation reflects what investors think of a company’s future earning potential and equity, while total value of corporate assets reflect the book value of everything the company owns.
A company can have trillions of dollars in assets on its balance sheet while having a lower stock market valuation (market cap) than a company with far fewer assets.
VW’s assets are worth more than 10x of what Nokia owns.
And why do Germans keeps telling themselves it has nothing to do with energy cost. Might as well be the main issue of High electricity cost that populus would agree on.
2006 it was 8 euro kwh.
Now its ranging from anything between 25 to 40 euro kwh.
Unstable energy equals unstable industry.
And now in 2026 eu brings subsidy to industries,giving them at 8 euro kwh,on half their usage, if they do “green” investments.
VW mismanagement is incredible. Now workers to pay the bill....they should all get fired.
My (stupid honest opinion) is that they should build the "people's car" again. Nowadays, it means a basic car with open software. The opposite of all brands. I'll buy it tomorrow.
We people have to be able to own the SW in our cars.
Can anyone explain to me how CARIAD lost more than €10 billion in 5 years?
Was that "lost" or was that "cost"?
In my Siemens days, I worked in the only stand-alone R&D centre in Siemens-VDO. Siemens had a stupid employee value calculation which started with the revenue of the site/unit and stuff we designed was produced all over the world but nothing at our site and therefore we had zero revenue. In their calculation, our head of R&D had less value than the cleaner in a factory. Did VW do something similar that they did something weird where financial numbers were detached from reality? Or was it that €10 billion was spent and nothing was ever used in a product?
I find it it incredible that that much money would be spent with no outcome. That would be mismanagement to the extreme. In general, I can not figure out how VW was able to spend so much money with so little in outcomes.
BTW whoever did due diligence on the Gotion stake acquisition should be fired.
How much did the legal case in the US against VW cost the company? As a lawyer, I worked on it from 2017 to 2019 and understood that VW was targeted for destruction, as it stood against new world order tenents.
I think arrogance was an important factor. And a hint of cowardice. Both led to: Never change a running system. Too Bad it doesn't run so smooth anymore.
What a sad and fascinating article! Someday soon someone's going to write a book about how this happened to one of Germany's leading industrial companies. I hope this book gets into the boardrooms, backrooms, finance, design & engineering, and the vehicle assembly lines. Too many lives and businesses are on the edge here. We will be hearing similar stories for years to come. Let's hope we pay attention and find purpose in finding better solutions. This is awful.
Great piece! Truly disappointing news for European industry, but spot on.
While there are many factors at play, I often think about the underlying 'software DNA'—or lack thereof. It helps explain not just the decline of European manufacturing, but also why Japan dominated the home appliance and PC eras only to lose its edge in the internet and smartphone age.
Whenever I bring this up, people argue that Europe invented modern web protocols, Linux, etc. I don't disagree—I've worked with incredible European software engineers myself, but they almost always work for Silicon Valley (myself included). My point is that the culture of software development—the iteration velocity and engineering mindset—just never took root in Japan or Europe the way it needed to.
China, on the other hand, aggressively absorbed Silicon Valley’s tech culture. So when Chinese EV makers like BYD pivoted toward Tesla's software-centric model, it felt like second nature—not to mention their rapid embrace of AI and robotics.
Did consumer preferences or the EU bureaucracy moved away from the combustion engine? Why used ICE car prices increased so much if people don’t want them? Why there is no existential crisis for Japanese auto manufacturers, and what were the lessons once all subsidies for particular type of vehicles stopped in the US?
Its misfortunate that the VW workers and shareholders can’t sue the EU bureaucrats for the tremendous damage caused
Brilliant piece and quite breath-taking in identifying the techtonic forces at work. The governance structure seems to lack agility, so the only hope of the glory years returning in the next 20 years you hope for in your optimistic ending is likely a crisis that will be worse than it needs to be in order for the various boards to smell the coffee.
Thank you for the excellent article, but why no mention of energy costs in Germany? Isn't this a major factor?
Thanks! As I pointed out: Our key issue in Germany is, that we loose product development. And this has nothing to do with high energy costs.
It's all the costs and left wing order ideology. Deutschland ist endfertig.
And something different from economic prespective. Whats more important to German people. A Volkswagen to be built in Germany. Or sending it to Slovakia and keep the "company" alive. And at what point its to be called a German Car Company itself. Just to keep it alive, keep sending its parts to everywhere else. When eventually it would have nothing to do with Germany, as cost will always go on increasing,it will sell and send itself away totally. Why would it be important to keep it alive that way.
And i have to say,Your article is nothing but excellent in pointing the issues of vw.
I called it 20 years ago. 😂
Thanks for your wise and reasoned analysis. It is so useful to have clarity in this context ideologically charged environment
Great article. From a different angle, my view is quite similar and my comparison was with Kodak. Worryingly, they are getting rid of « side activities » where could be lying some of the capabilities they might be needing. Kodak did the same thing. https://guillaumegerondeau.substack.com/p/strategy-and-execution-in-a-time?r=2e8di&utm_medium=ios
This isn’t exactly true.
In the Euro STOXX, Nokia replaced VW in the euro STOXX 50 index, that is true.
What isn’t true is that this means Nokia is worth more than VW.
This is the difference between market capitalisation and total value of corporate assets.
Market capitalisation reflects what investors think of a company’s future earning potential and equity, while total value of corporate assets reflect the book value of everything the company owns.
A company can have trillions of dollars in assets on its balance sheet while having a lower stock market valuation (market cap) than a company with far fewer assets.
VW’s assets are worth more than 10x of what Nokia owns.
And why do Germans keeps telling themselves it has nothing to do with energy cost. Might as well be the main issue of High electricity cost that populus would agree on.
2006 it was 8 euro kwh.
Now its ranging from anything between 25 to 40 euro kwh.
Unstable energy equals unstable industry.
And now in 2026 eu brings subsidy to industries,giving them at 8 euro kwh,on half their usage, if they do “green” investments.
Why,the subsidy, because its an issue.
VW mismanagement is incredible. Now workers to pay the bill....they should all get fired.
My (stupid honest opinion) is that they should build the "people's car" again. Nowadays, it means a basic car with open software. The opposite of all brands. I'll buy it tomorrow.
We people have to be able to own the SW in our cars.
I think I'll die waiting.
Great article by the way.
Can anyone explain to me how CARIAD lost more than €10 billion in 5 years?
Was that "lost" or was that "cost"?
In my Siemens days, I worked in the only stand-alone R&D centre in Siemens-VDO. Siemens had a stupid employee value calculation which started with the revenue of the site/unit and stuff we designed was produced all over the world but nothing at our site and therefore we had zero revenue. In their calculation, our head of R&D had less value than the cleaner in a factory. Did VW do something similar that they did something weird where financial numbers were detached from reality? Or was it that €10 billion was spent and nothing was ever used in a product?
I find it it incredible that that much money would be spent with no outcome. That would be mismanagement to the extreme. In general, I can not figure out how VW was able to spend so much money with so little in outcomes.
BTW whoever did due diligence on the Gotion stake acquisition should be fired.
How much did the legal case in the US against VW cost the company? As a lawyer, I worked on it from 2017 to 2019 and understood that VW was targeted for destruction, as it stood against new world order tenents.
I think arrogance was an important factor. And a hint of cowardice. Both led to: Never change a running system. Too Bad it doesn't run so smooth anymore.
What a sad and fascinating article! Someday soon someone's going to write a book about how this happened to one of Germany's leading industrial companies. I hope this book gets into the boardrooms, backrooms, finance, design & engineering, and the vehicle assembly lines. Too many lives and businesses are on the edge here. We will be hearing similar stories for years to come. Let's hope we pay attention and find purpose in finding better solutions. This is awful.
Self inflicted. Cheating bastards
Great piece! Truly disappointing news for European industry, but spot on.
While there are many factors at play, I often think about the underlying 'software DNA'—or lack thereof. It helps explain not just the decline of European manufacturing, but also why Japan dominated the home appliance and PC eras only to lose its edge in the internet and smartphone age.
Whenever I bring this up, people argue that Europe invented modern web protocols, Linux, etc. I don't disagree—I've worked with incredible European software engineers myself, but they almost always work for Silicon Valley (myself included). My point is that the culture of software development—the iteration velocity and engineering mindset—just never took root in Japan or Europe the way it needed to.
China, on the other hand, aggressively absorbed Silicon Valley’s tech culture. So when Chinese EV makers like BYD pivoted toward Tesla's software-centric model, it felt like second nature—not to mention their rapid embrace of AI and robotics.
Did consumer preferences or the EU bureaucracy moved away from the combustion engine? Why used ICE car prices increased so much if people don’t want them? Why there is no existential crisis for Japanese auto manufacturers, and what were the lessons once all subsidies for particular type of vehicles stopped in the US?
Its misfortunate that the VW workers and shareholders can’t sue the EU bureaucrats for the tremendous damage caused
Brilliant piece and quite breath-taking in identifying the techtonic forces at work. The governance structure seems to lack agility, so the only hope of the glory years returning in the next 20 years you hope for in your optimistic ending is likely a crisis that will be worse than it needs to be in order for the various boards to smell the coffee.