Herbert Diess @TechCrunch about #Scout, #Software, #AutonomousDriving and more

TL;DR

Volkswagen plans to revive Scout as an electric-only American brand offering a large SUV and pickup truck, with production targeted for 2026. The company expects Scout could add roughly two percentage points toward its goal of reaching 10 percent US market share, while software, design, durability, fast charging, and other technology could help distinguish the vehicles.

Transcript

all right well welcome to herbert deese the vw group ceo thank you so much for joining us today i'm glad to be with you yeah and i see i i see that it looks like you're in a scout too i want to say late 1970s is that a 1978-1979 exactly yeah roundabout v8 engine all right well one of the first suvs one of the first suvs and impressive no really hig... Read More

Key Insights

• Scout is planned as an electric-only American brand with a large SUV and pickup truck. Volkswagen believes the historic name provides recognition and cultural relevance, while the vehicles still must deliver modern technology, strong design, and performance that meet current customer expectations.
• The Scout opportunity emerged through Volkswagen's purchase of Navistar, which included the historic American brand. Volkswagen then assigned a team to develop early drawings and concepts, combining available technology and components with design references drawn from Scout's heritage.
• Heritage is an advantage because customers may associate Scout with adventure, freedom, and early recreational vehicles. Herbert Diess also identifies recognizable characteristics such as short front overhangs and sleek surfaces, but says tradition cannot substitute for building an excellent modern vehicle.
• Scout manufacturing remained undecided at the time of the interview. Volkswagen was evaluating both brownfield and greenfield options, while expecting the SUV and pickup program to support approximately one normal plant with potential annual capacity of about 200,000 to 300,000 vehicles.
• Scout's sales model had not yet been selected. Volkswagen planned to consider existing dealerships, dedicated Scout dealerships, franchise arrangements, and direct sales after studying market experience, competitors, electric vehicles, pickups, SUVs, and the needs of American customers.
• Scout could contribute roughly two percentage points toward Volkswagen's goal of reaching 10 percent United States market share by the end of the decade. The remaining growth was expected from additional electric vehicles, expanded Chattanooga capacity, and the United States launch of the ID.4.
• Scout vehicles could differentiate themselves through build quality, durability, design, electric drivetrains, comfort, electronics, software, fast charging, and driver-assistance technology. Volkswagen was also considering solar panels because the large surface area could support energy harvesting for leisure or work applications.
• Volkswagen's software strategy is shifting from buying largely finished programs from suppliers toward developing greater internal capability. Continuous vehicle updates require a different model because software must be upgraded and deployed throughout the vehicle's life instead of remaining untouched after installation.

Questions & Answers

Q: Why is Volkswagen reviving Scout as an electric vehicle brand?

Volkswagen believes Scout offers a credible entry into the distinctly American market for large SUVs and pickup trucks. The brand has a rich history, remains familiar to many Americans, and is associated with early SUVs, adventure, and freedom. Volkswagen sees an opening because established manufacturers and new entrants are all moving toward electric vehicles, effectively beginning a new competitive era.

Q: What vehicles does Volkswagen plan to launch under Scout?

Volkswagen plans two electric-only Scout body variants: a large SUV and a large pickup truck. The vehicles are intended to combine references to the historic Scout design with modern electric technology. The stated production target is 2026, although many details concerning manufacturing, sales, final design, and specific features were still undecided during the interview.

Q: Where will Volkswagen manufacture the new Scout vehicles?

Volkswagen had not selected a manufacturing location at the time of the interview. The company was considering whether to use a brownfield site or build on a greenfield site, with decisions expected after further evaluation. Herbert Diess said the two planned vehicles should provide enough volume to fill one normal plant, potentially producing about 200,000 to 300,000 vehicles.

Q: Will Scout sell vehicles directly to consumers or through dealerships?

Scout's sales model had not yet been decided. Volkswagen planned to evaluate direct sales, existing Volkswagen dealerships, dedicated Scout dealerships, and appropriate franchise arrangements. A fully staffed team based in the United States would study American customers, competitor experiences, manufacturing opportunities, electric vehicles, pickup trucks, and SUVs before recommending how the new brand should sell its vehicles.

Q: How could Scout help Volkswagen grow in the United States?

Herbert Diess estimated that Scout could contribute roughly two percentage points toward Volkswagen's goal of reaching 10 percent United States market share by the end of the decade. Scout would not deliver the entire increase. Additional growth was expected from new electric vehicles, greater capacity in Chattanooga, and the planned United States launch of the ID.4.

Q: How will electric Scout vehicles compete with other pickups and SUVs?

Volkswagen expects Scout to compete through build quality, durability, distinctive design, capable electric drivetrains, comfort, electronics, and software. The designs would include cues recalling the original Scout while meeting modern standards. Potential innovations mentioned in the interview include fast charging, driver-assistance capabilities, practical uses for battery power, and solar panels that could harvest energy across the vehicles' large surfaces.

Q: Why is Volkswagen developing more software internally?

Volkswagen historically purchased substantial amounts of automotive software from first-tier suppliers, but connected vehicles require continuous upgrades and deployment. Herbert Diess said the older approach of installing purchased software and leaving it untouched for an entire vehicle life cycle no longer works. The company was therefore expanding internal capabilities while preparing charging, driver-assistance, and other software updates for its electric vehicles.

Q: What software improvements did Volkswagen discuss for its electric vehicles?

Herbert Diess said Volkswagen had two more software updates planned for that year, including different charging algorithms and enhancements to driver-assistance functionality using swarm data. He also pointed to positive feedback for the electric ID. Buzz and predicted improved software performance in the United States-built ID.4, while acknowledging that strengthening an established manufacturer's internal software capabilities is difficult.

Summary

In this video, Herbert Diess, the CEO of VW Group, discusses the launch of a new brand called "Scout" in the U.S. The brand will focus exclusively on electric vehicles (EVs), aiming to capture a portion of the American SUV and pickup truck market. Diess explains the rationale behind the decision and the opportunities that arise from the current shift towards electric vehicles. He also touches on the importance of heritage and nostalgia in the automotive industry and how VW plans to leverage that with the Scout brand. Additionally, Diess talks about VW's plans for production, sales strategies, and the role of software and autonomous driving in their future vehicle lineup. He also shares insights into their relationship with Tesla and their approach to supply chain challenges in the EV industry.

Questions & Answers

Q: Why does VW need a new brand in the United States?

The SUV and pickup truck segment is highly popular in the U.S., and VW sees a significant opportunity to relaunch an American brand with a rich history. While heritage alone is not sufficient, combining it with modern technology and design can lead to success.

Q: Why did VW choose to leverage the historical name "Scout" instead of creating an entirely new brand?

Heritage plays an important role in creating a connection with customers. The rich history associated with the Scout name evokes nostalgia and reverence. While a strong history provides a good foundation, VW still needs to deliver an excellent car that meets modern standards.

Q: Where is VW planning to produce the Scout brand vehicles?

It is still early to determine the exact production plans. VW is considering various options, including starting on a brownfield or greenfield site. The goal is to produce a large-sized SUV and pickup truck, potentially in one plant, with two body variants.

Q: Will the Scout brand vehicles be sold directly to consumers or through existing VW dealerships?

The sales strategy for the Scout brand is still under consideration. VW is assembling a competent team in the United States to understand the American customer's needs, explore manufacturing opportunities, and make informed decisions about sales channels.

Q: VW has an ambitious goal to increase its U.S. market share to 10% by the end of the decade. How does the Scout brand fit into this goal?

The Scout brand alone cannot achieve the entire goal, but it is expected to contribute around 2 percentage points of market share. The rest of the growth will come from other factors, such as the launch of new EVs and overall market growth.

Q: What capacity targets does VW have for the Scout brand vehicles?

The specific capacity targets are yet to be determined. VW aims to fill one plant facility, which could potentially produce 200,000 to 300,000 vehicles. Economic feasibility will be a crucial factor in determining the capacity.

Q: Is VW planning to build a battery gigafactory in the United States?

Yes, VW is considering the establishment of a battery gigafactory in the United States. The location is still undecided, but it is a part of VW's strategy to secure its battery supply chain and meet the demand for EVs.

Q: How does VW plan to make the Scout brand vehicles stand out in a competitive market with other EV pickups and SUVs?

VW believes in its ability to differentiate through extraordinary build quality, durability, and design. The Scout vehicles will combine historical cues with modern technology, making use of innovations in electric drivetrains, fast charging, and other features.

Q: How is VW investing in software innovation for its vehicles?

VW recognizes the importance of software in modern cars and has been building up its software capabilities. They are working on enhancing software performance, including multiple software updates this year for charging algorithms and driver assistance functionality. VW is ramping up its internal capabilities to develop and deploy software continuously and safely.

Q: Is VW planning to acquire more software companies?

VW is actively expanding its software capabilities, and more acquisitions are expected in the future. While specific details cannot be disclosed, VW is interested in software companies that can contribute to driving capabilities, in-car experience, and software deployment in the cloud.

Q: What are VW's plans regarding autonomous driving?

VW is working on both robo-taxi and private car applications of autonomous driving. They have partnered with Argo AI to develop autonomous driving technology and are gradually advancing their capabilities. The initial focus will be on simpler environments and gradually expanding to more complex situations and weather conditions. The goal is to offer a safe and efficient autonomous driving experience, both in commercial and private vehicles.

Q: How would you describe the relationship between VW and Tesla?

VW has a positive relationship with Tesla, and they learn from each other. While VW does not aim to partner directly with Tesla due to their unique business model, they respect Tesla's achievements and consider Tesla's ideas and strategies relevant for the industry.

Q: Is VW looking to mine raw materials for battery production?

VW acknowledges the crucial role of raw materials, specifically for battery production. They are investing in their own battery production and securing long-term contracts for raw material supply. While mining operations might be considered, initial focus is on establishing a reliable and sustainable supply chain for the fast ramp-up of EV production.

Q: In the face of supply chain challenges, how is VW protecting its supply chain for EVs?

VW is focused on building its own battery production capabilities and securing long-term contracts for raw materials. This ensures a stable supply chain for EV production. The challenge lies not only in securing the required materials but also in developing the necessary ratios and exploring potential alternatives.

Takeaways

VW's decision to launch the Scout brand in the U.S. demonstrates their commitment to entering the American SUV and pickup truck market with electric vehicles. The brand leverages heritage and nostalgia, aiming to combine it with modern technology and design. VW is investing in battery production, software innovation, and autonomous driving capabilities to differentiate themselves. The relationship with Tesla brings mutual respect, and VW learns from Tesla's achievements. The challenge of securing a reliable supply chain for raw materials is being addressed through investments in production capabilities and long-term contracts. Through these efforts, VW aims to achieve its ambitious goal of increasing its U.S. market share to 10% by the end of the decade.

Summary & Key Takeaways

• Volkswagen sees an opportunity to revive Scout because the historic American brand is closely associated with early SUVs, adventure, freedom, and distinctive design. The company plans to combine that heritage with modern electric technology, but Herbert Diess stresses that nostalgia alone will not be enough without an excellent vehicle meeting current standards.

• The initial Scout plan covers two electric-only body variants: a large SUV and a large pickup truck. Volkswagen had not decided whether to use a new or existing manufacturing site, nor had it selected a sales model. A United States-based team would study customers, manufacturing options, dealerships, franchises, and direct sales.

• Scout forms one part of Volkswagen's larger United States growth strategy. The brand could contribute roughly two percentage points toward a 10 percent market-share goal, while additional electric vehicles and expanded Chattanooga capacity provide further growth. Volkswagen was also considering a United States battery plant and capacity of about 200,000 to 300,000 Scout vehicles.