When Oliver Blume became CEO of Volkswagen Group in September 2022, he inherited 12 brands, 120 factories and 650,000 employees. Within two years, Chinese EV competition and German structural costs had combined into an existential financial crisis. By December 2024, Blume had agreed to cut 35,000 jobs, close two SAIC plants and commit to €4 billion in savings. He called it ‘just the beginning.’
Sources: Volkswagen Group FY2024 Annual Results (Mar 2025) | VW Group H1 2025 Report (Jul 2025) | VW Group Q1 2025 Results | WardsAuto Dec 2024 & Jan 2025 | Fortune Sep 2024 | Euronews Mar 2025 | EMobility+ Jul 2025 | AInvest Aug 2025 | Business Insider Germany (Blume internal interview) Jan 2025
The Engineer Who Held Two Jobs at the Top of Europe’s Auto Industry
Born in 1968 in Braunschweig, Blume studied mechanical engineering before joining VW Group in 1994. Rotating through Audi, Seat and Porsche over three decades, his defining achievement was the Taycan — launched in 2019, it delivered 0–100 km/h in 2.8 seconds, 500+ km range and margins above 20%, proving EVs could be both aspirational and profitable.
Retaining the Porsche CEO role alongside the Group job generated governance controversy from day one. Deka Investment’s Ingo Speich criticised the dual mandate as blurring accountability; formal separation was expected by early 2026. The structural cost became visible in H1 2025: Porsche’s operating profit dropped 67%, with €1.1 billion in special charges including €500 million for battery activities and €400 million for US tariffs.
“Our goal is to become the leading technological company in the automotive industry. What we have achieved is a first step. Just the beginning.”
— Oliver Blume, Volkswagen Group CEO, January 2025
🏭 Group revenue (FY2024): ~€322 billion; operating profit €19.1 billion (margin 5.9%, adjusted 6.7%) (Volkswagen Group FY2024 Annual Results, March 2025)
📊 VW brand BEV sales (2024): 383,100 units — down 10,900 YoY; Group EU EV market share 28% (H1 2025) (WardsAuto Jan 2025; VW Group H1 2025 Report)
👥 Restructuring: 35,000 German jobs cut by 2030; German production capacity reduced 700,000 vehicles/yr (WardsAuto Dec 2024; VW Group FY2024 Report)
💰 Blume’s salary (2023): €10.3 million; earns more in 2 days (€56,438) than most VW workers earn in a year (Business Insider Germany / WardsAuto Jan 2025)
Three Defining Decisions Under Blume’s Leadership
-
The December 2024 Restructuring Agreement — Rewriting a 30-Year Contract
The most consequential decision of Blume’s tenure came from labour, not a product launch. In September 2024, facing €10 billion in required savings, he proposed terminating Volkswagen’s 30-year job security agreement, cutting wages 20% and closing up to three German plants — measures Bild described as unprecedented in Volkswagen’s 87-year history. Half the supervisory board is controlled by labour representatives, giving IG Metall de facto veto power.
The December 2024 compromise: 35,000 jobs cut by 2030 via voluntary redundancy; capacity reduced by 700,000 vehicles; €4 billion in savings targeted; Osnabrück and Dresden plants spared. The VW brand’s annual savings plan: €1.5 billion. The 2024 dividend was cut 30% to €6.30 per ordinary share, reflecting €2.6 billion in extraordinary restructuring costs.
⚠️ GOVERNANCE CONTEXT: VW’s share price fell ~25% in the 12 months to mid-2025, against the DAX and European automotive index. P/E ratio of 3.57 — far below its 5-year average — reflects investor scepticism about execution pace. (AInvest, August 2025)
-
The Rivian Alliance — Buying a Software Future
Cariad’s platform delays pushed next-generation EV launches back 12–18 months. Rather than continuing to build internally, Blume announced in June 2024 a $5.8 billion JV with Rivian — giving VW access to proven electrical architecture and ADAS for Group-wide deployment by 2027, with an initial $1 billion tranche deployed.
In Q1 2025, VW’s software business generated a 33% YoY revenue increase from Rivian-linked licence income — early evidence that acquiring a working platform outpaces building one.
-
China — Managing Decline While Retaining the World’s Largest Car Market
China deliveries fell 8.3% in 2024 to 2,198,900 vehicles; two SAIC facilities closed; volumes fell a further 6% in H1 2025. BYD, Geely and SAIC’s own EV brands produce at unit costs VW cannot match from Wolfsburg — Chinese assembly labour runs at roughly one-quarter of German rates.
Blume’s response is a portfolio approach: locally tailored EVs with Chinese partners, the ID.7 Tourer and an entry-level electric model at the Chinese price point, alongside maintained combustion volumes. The strategy preserves revenue without ceding the market — but does not restore the growth trajectory that financed European investments throughout the 2010s.
Volkswagen Group Strategic Dashboard: FY2024 to H1 2025
| Metric | FY2024 | H1 2025 | Direction / Target |
| Group revenue | ~€322bn | Stable YoY (sales +4% EU) | Target: +5% YoY full-year 2025 |
| Operating profit / margin | €19.1bn / 5.9% | €4.2% (incl. €1.3bn US tariffs) | Target: 5.5–6.5% full-year 2025 |
| BEV sales (Group) | 383,100 (−10,900 YoY) | EU order backlog: +64% BEV YoY | 28% EU EV market share (H1 2025) |
| China deliveries | 2,198,900 (−8.3%) | Continued decline expected | Two SAIC plants closed in 2024 |
| Restructuring cost savings | Target: €4bn by 2026 | €1.5bn/yr VW brand plan active | 35,000 jobs cut from DE payroll by 2030 |
| Rivian / software JV | $5.8bn total commitment | $1bn initial tranche deployed | Unified EV platform + ADAS by 2027 |
Sources: VW Group FY2024 Annual Results (Mar 2025); VW Group H1 2025 Report (Jul 2025); VW Group Q1 2025 Results; WardsAuto Dec 2024.
Where Blume’s Bet Is Working: Europe and the Order Book
Western Europe is the strongest counter-narrative to VW’s financial pressure. In Q1 2025, the Western European order backlog reached almost 1 million vehicles, BEV orders rose 64% YoY and exceeded 20% of total orders. New launches — Skoda Elroq, CUPRA Terramar, Audi Q6 e-tron, VW ID.7 Tourer — drove a 15% order intake increase. By H1 2025, VW Group held a 28% European EV market share — the largest of any manufacturer.
The product cycle arrived 18–24 months late due to Cariad delays and slower EV adoption. The EU’s 2035 ICE ban provides the regulatory floor for sustained EV investment. The Automotive Division’s investment ratio falls from 13% in 2025 to ~10% in 2027 — peak electrification capex is near, and free cash flow should recover as the cycle matures.
Three Structural Tensions That Will Define Blume’s Legacy
-
The Dual Role: Governance Risk at Scale
Running the world’s largest automaker and a high-margin luxury sports car brand simultaneously creates a structural conflict of interest that governance professionals have flagged since 2022. Capital allocation between Volkswagen’s cost-reduction programme and Porsche’s EV investment; R&D prioritisation across the portfolio; management attention during simultaneous crises in both businesses — all of these require trade-offs that a single executive cannot make without disadvantaging one entity. The formal leadership separation, expected in early 2026, is the single governance decision with the greatest potential to unlock shareholder value. Until it materialises, the dual-role discount will likely remain embedded in VW’s historically low valuation multiple.
-
The German Cost Structure — An Existential Competitive Disadvantage
Volkswagen’s German manufacturing operations are the company’s most iconic assets and its most acute cost burden. Labour agreements negotiated over decades mean that German assembly workers earn multiples of comparable wages in Slovakia (where the VW Enyaq is produced), Spain or China. The December 2024 restructuring — 35,000 jobs, €4 billion in savings — addresses the symptom but does not eliminate the structural cost gap. As Chinese manufacturers produce comparable EVs at 30–40% lower unit costs, Volkswagen’s ability to compete on price in the segment below €35,000 — where European EV adoption is most volume-sensitive — depends on accelerating the geographic shift of manufacturing to lower-cost EU member states while maintaining German brand perception.
-
The Software Inflection Point
The automotive industry’s transition to software-defined vehicles means that competitive differentiation is increasingly a function of over-the-air update capability, AI-driven driver assistance, connectivity and user experience — not chassis engineering or combustion efficiency. Volkswagen’s Cariad delay demonstrated the difficulty of building world-class software capability inside a 650,000-person manufacturing organisation. The Rivian JV is Blume’s structural response; its execution by the 2027 deployment target will determine whether Volkswagen can compete with Tesla’s software integration and the increasingly capable Chinese EV software platforms in the next product generation.
Conclusion: A Transformation in Progress — With No Margin for Delay
Blume faces pressures no predecessor encountered simultaneously: China in structural decline, a German cost structure built for a different era, a software deficit exposed by Cariad, and a labour governance model in which half the supervisory board can block transformation. The December 2024 restructuring, the Rivian alliance and the European product cycle are the three pillars of his response. Each is directionally correct. None is yet sufficient.
For EU investors, VW is Europe’s largest industrial employer, its most China-exposed corporate name, and the company whose electrification outcome most directly determines whether European automotive manufacturing survives the software-defined transition. The 28% EU EV share, 64% BEV order growth and €34–37 billion liquidity target are genuine foundations. Whether Blume builds on them from a single chair at two of Europe’s most consequential companies is the defining leadership question in European business.
