Two decades ago, Oliver Blume earned his doctorate in Shanghai under Wan Gang, who, as China’s Minister of Science and Technology, later became the driving force behind the country’s electric vehicle revolution.
Now Blume, CEO of both Volkswagen and Porsche, must protect two of Germany’s biggest industrial names from his former professor’s successes, which have spawned China’s EV industry champions from automaker BYD to battery giant CATL.
A key issue facing Blume is how nearly century-old companies that pride themselves on the quality of their hardware reinvent themselves for the coming age of electric and software-dependent vehicles.
The 56-year-old made one of his boldest moves yet this week when Volkswagen announced an investment of up to $5 billion in California electric car start-up Rivian. The two groups will form a joint venture to develop the new software, and Volkswagen will immediately gain access to the Rivian EV architecture.
“When it comes to big technology transformation, you can’t do it all by yourself,” he told the Financial Times. “It should be a win-win situation. . . Our motivation is to accelerate the software transformation at Volkswagen across all our brands. Rivian has best-in-class architecture. . . Volkswagen has scale”.
Volkswagen, which owns the majority of Porsche, is struggling to make the transition to electric vehicles, as well as facing a rapid decline in its dominance in China and a struggle to gain a serious foothold in the US.
The deal with Rivian was hailed by investors in the US company as a lifeline that sent its shares up more than 30 percent, but some Volkswagen shareholders are concerned about the scale of the investment – nearly half of the group’s estimated net cash flow this year.
But observers said the move showed an acknowledgment that Volkswagen’s attempts to develop software have not been successful and that the company needs to look elsewhere to catch up with digital-native automakers such as Tesla and BYD.
Born in Braunschweig, not far from VW’s headquarters in Wolfsburg, Blume studied mechanical engineering at the city’s technical university before joining Audi as a trainee in 1994. Over the following years, he worked his way up through the VW Group, including serving as head of production for the Seat brand in Spain, where he still has a home today.
Many of his colleagues hold him in high esteem. Daniela Cavallo, chairman of the Volkswagen Group’s works council – the body representing the interests of the company’s 680,000-strong global workforce of elected employees and management – calls him a “true team player”, hailing his “clear strategy” and credibility.
When Porsche’s CEO was handed the reins of the parent company in 2022 and became the only person to lead two Dax 40 companies at the same time, Blume inherited from Volkswagen a halt to its attempt to build electric car software in Germany with its Cariad subsidiary.
“From an investor’s point of view, the whole Cariad solution has basically been associated with delays, failures, high costs and an environment that has caused quite a stir in the Volkswagen world,” said a senior executive at a major European asset manager. “Unlike his predecessor, Oliver Blume did not see the benefits of ‘Software made in Wolfsburg’.”
In January, Blume also spearheaded a historic partnership with Chinese EV manufacturer Xpeng to jointly develop a new generation of EVs, essentially moving the company’s Chinese software development out of Germany.
“Over the past year and a half, we’ve made many important decisions,” Blume said. “It is up to us to combine our heritage with this future technology.”
The Rivian partnership is an effort both to solve the company’s software development problem and to give the company a bigger foothold in the US premium market, where rivals Mercedes, BMW and Tesla are doing better.
“Blume may be trying to be the first CEO to shift more focus to North America than his predecessors,” said Matthias Schmidt, an independent auto analyst. “If he can succeed here, it could probably be as big a step as when former Volkswagen CEO Carl Hahn [from 1982 to 1993] decided to double China.”
The strategy is all the more important as Volkswagen is rapidly losing market share in China, from nearly 20 percent in 2020 to 15 percent last year.
“This is what we need most [move] in North America to be better balanced between regions,” Blume said, referring to the three main sales markets of China, Europe and North America.
His predecessor Herbert Diess thought the solution was to revive Scout, the iconic American brand of the 1960s and 1970s, which VW acquired in 2021, to push into the US. Blume will hope that outdoor brand Rivian, whose SUVs and pickups start at about $80,000, could be a better entry point.
Blume is an avid tennis player and observer. One colleague and tennis partner told the FT Blume was a methodical player who first traded three or four shots before working his way to a winner.
Industry insiders say he is unlike previous Volkswagen bosses who were able to impose their will on various factions at Wolfsburg through sheer force of personality.
“VW is a company that thrives on a strong man — full of huge egos and strong brands,” said one auto veteran who knows Blume. “Oliver is soft spoken and actually listens to people. The question for VW is, can the nice guy win? Especially when he has a tougher decision to make than his predecessors?’
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