VW, Again, Said To Need Urgent Survival Reform; Don’t Hold Your Breath

Volkswagen is facing yet another existential crisis, with critics demanding it finally behave like a normal shareholder-owned company. But entrenched governance and political interests mean radical reform remains unlikely. The world’s second-largest automaker has been here before — the dieselgate scandal, failed EV pivots, and now a brutal competitive landscape. This time, the pressure is coming from investors tired of seeing VW’s market value lag behind Tesla and BYD. Chief among the critics is a growing faction of institutional shareholders who argue that Volkswagen’s unique ownership structure — where the state of Lower Saxony holds a blocking minority and the Porsche-Piëch family controls a majority of voting rights — shields management from accountability. Without the threat of a takeover or activist board, they say, executives have little incentive to cut costs, streamline operations, or accelerate the EV transition. The result: Volkswagen’s operating margin has slipped below 5%, well behind rivals like Stellantis and BMW, while its Chinese joint ventures lose ground to local EV champions like BYD and Nio. The company’s flagship ID. series has struggled with software glitches and range anxiety, and its planned €2 billion Trinity factory in Wolfsburg faces delays. Analysts at Bernstein and UBS have cut their price targets, warning that VW’s cost base is too high for the volume it sells. Meanwhile, European Union emission fines loom, and the shift to electric is not happening fast enough to meet 2025 targets. The key names here are CEO Oliver Blume, who took over in 2022 but has yet to deliver a clear turnaround plan, and works council head Daniela Cavallo, who has resisted factory closures. The real power lies with the Porsche-Piëch family, now represented by Hans Dieter Pötsch, and Lower Saxony’s prime minister, Stephan Weil, both of whom prioritize jobs over profits. For them, VW is not just a company — it’s a pillar of regional identity and a political bargaining chip. The broader implication: Volkswagen’s crisis is a case study in how legacy automakers struggle to adapt when governance is captive to stakeholders who fear change more than they fear failure. As Chinese and US competitors race ahead, VW risks becoming the Nokia of the automotive world — a once-dominant giant that couldn’t reinvent itself in time. What happens next will depend on whether the upcoming supervisory board meeting in July produces any concrete reform proposals. Watch for signs of a capital restructuring, a potential carve-out of the struggling software unit Cariad, or a hint that the family might dilute its voting stake. Without such moves, the refrain will remain: don’t hold your breath.