Volkswagen CIO Deals With An Electric Car Setback

Volkswagen's electric car's launch has been delayed due to software problems
Volkswagen’s electric car’s launch has been delayed due to software problems
Image Credit: Rutger van der Maar

Being a CIO is not an easy job and if you have the CIO job at a major automotive manufacturer, it is even harder. That’s why it’s not all that surprising to see that the CIO at Volkswagen has just suffered a significant setback. The future of the company is riding on their forthcoming all electric car that they will be using to compete with the likes of Tesla. However, the planned launch of this car has had to be rolled back because of software problems. Looks like the CIO has a real problem on his hands.

What Went Wrong With Volkswagen’s Software?

The Volkswagen CIO has just had to announce that its flagship electric car model, the ID.3 hatchback, wouldn’t be delivered to customers until September, several months later than originally planned after software glitches delayed production. Volkswagen said that binding orders for the first 30,000 vehicles can be made, but an early version of the car without core connectivity features wouldn’t begin rolling out to customers until later on.

The move marks the second time Volkswagen had to postpone the launch of the vehicle it has billed as the mass-market answer to Tesla’s high-end offering. The company had originally planned for the full-featured vehicle to go on sale during the summer. A full-feature version of the ID.3 that shows off the importance of information technology, with the ability to install connected apps for infotainment, digital assistants, bookings and other functions, wouldn’t be available until the end of the year, the company said in a statement.

The company has had previous problems with their new all electric car. The ID.3 delays were among the factors that prompted Volkswagen’s board to strip Chief Executive Herbert Diess of some of his responsibilities. Volkswagen has been struggling with other issues too, including labor tensions, an earlier botched model launch this year, falling global demand for cars and dislocations in its markets and supply chains caused by the coronavirus pandemic. The CIO’s persistent problems with the vehicle’s complex software show how difficult it is for even the biggest, best-funded automotive companies to replicate the success that Silicon Valley upstart Tesla Inc. has had producing and selling attractive electric cars.

What’s Next For Volkswagen?

The ID.3 is supposed to be Volkswagen’s electric icon, the car that the company hopes will become as popular with the masses as its legendary Beetle and bestselling Golf models. But preparation for a launch has been plagued by software failures and restrictions on maintaining production in the midst of the pandemic. The ID.3’s internet connection is meant to allow owners to update the car’s systems wirelessly without having to make a pit stop at a dealership. Tesla already does this, but Volkswagen’s new army of software engineers has so far failed to establish a robust link between the car and the company’s cloud-based applications that it has been developing with Microsoft Corp.

The last few months working under the difficult conditions of the pandemic have been a big challenge for the entire Volkswagen ID.3 team.That makes the imminent market launch of the ID.3 all the more important. The stripped-down “first edition” ID.3 has a starting price of under €40,000 ($45,230), making it eligible for up to €9,000 in German government subsidies that were recently approved to help the auto industry recover from the Covid-19 pandemic. Electric vehicles are still just a niche compared with the broader market, but sales are growing strong. In May, sales of new battery electric vehicles rose 20% from a year ago to 5,578 vehicles.

Plug-in electric vehicles accounted for about 7% of new car sales in the European Union in the first three months of the year. The number of new plug-in electric vehicles sold in the EU doubled to 167,132 vehicles in the first quarter. Volkswagen has made overtaking Tesla a strategic priority. The Volkswagen brand alone is targeting annual production of 1.5 million electric cars by 2025. Development of electric models is taking place across all of the company brands that include Audi, Porsche, Skoda, SEAT, Lamborghini and Bentley. As a whole, the company is investing €33 billion in electrification through 2024.

What All Of This Means For You

Although Tesla has made the creation of an all-electric vehicle look easy, it turns out that it’s not. The Volkswagen CIO is in the process of discovering just how hard it can be to create a brand new all-electric car that is based on new software. The company has just announced that the rollout of their new ID.3 model will be delayed because of software problems.

Software problems have dogged the ID.3 development since the beginning. The arrival of the Covid-19 pandemic has not helped things. The biggest problem that Volkswagen’s software developers are currently facing is that they have been unable to create a link between the car’s onboard software systems and the internet in order to allow for software updates. Volkswagen plans on initially introducing a “stripped down” version of the ID.3. The hope is to be able to tap into the growing German market for electric vehicles. Volkswagen is betting heavily on all electric vehicles across all of its brands.

Staying on top of a large scale software development effort is not an easy thing to do. The Volkswagen CIO has allowed the ID.3 project get away from him and the result is that the team has not been able to meet their delivery deadlines. The person in the CIO position is going to have to work with the ID.3 team and determine what is holding them back Once this has been identified, the CIO is going to have to step in and provide the team with the resources that they will need in order to solve their problems. If he can do this, the perhaps the Volkswagen CIO will be able to show the company how a software project should be done!

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: How can the Volkswagen CIO get the ID.3 project’s software back on track?

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What We’ll Be Talking About Next Time

You would think that being a CIO these days would be a pretty easy job. All you really have to do is to find ways to move more and more of your company’s IT assets into the cloud and everyone will think that you are doing a great job! However, it turns out that a number of people with the CIO job who understand the importance of information technology are starting to have second thoughts about doing exactly that. It turns out that there are a number of issues such as cost and security that make what seemed like a simple decision a lot harder. CIOs need to take a careful look at their current situation and make the right decisions.