Ralf Brandstätter is a Volkswagen Group lifer. He joined the firm 28 years ago, working his way up the management ranks in relatively low-profile purchasing and procurement roles. So when he was named the new CEO of the Volkswagen brand in June last year, especially with reports that his predecessor Herbert Diess – who remains Volkswagen Group CEO and Volkswagen brand chairman – was shuffled out of the role in an internal power struggle, it seemed Brandstätter’s mission was to maintain the status quo.
After all, even with his appointment coming in the middle of a global pandemic, Brandstätter took on the top job in Wolfsburg in a far better position than his predecessors. Matthias Müller had to steer the brand through the immediate fallout of Dieselgate, before Diess oversaw the development and launch of the MEB EV platform and ID family.
The first ID cars are now on the road, sales and profits are strong and Volkswagen is weathering the Covid-19 storm with remarkable resilience.
So with Diess leading the group’s shift to electrification, it seems that all Brandstätter really needs to do is steer a steady course and keep the proverbial tanker pointed in its current direction. Except he’s actually charting a bold new course – while simultaneously trying to switch the powertrain of the tanker. He’s moving beyond turning Volkswagen from a brand that sells mostly ICE cars to mostly electric ones (which changing laws will soon force all brands to do anyway). Under the new Accelerate strategy, Brandstätter is working to make Volkswagen carbon-neutral, reinvent its production network, fundamentally change its business model and develop a new generation of electric, connected and autonomous cars. He even wants to turn Volkswagen from a car maker into a software development company.
“The real disruption is still coming,” he says. “If you believe with electric cars alone we’ve arrived in the future already, you’re wrong. Digitalisation is the key. The car is now a software-driven product.”
This belief that software will be the dominant differentiator for future cars is why, despite having had major problems with the software in the ID 3 and new Golf, the group is pushing on with plans to develop its own operating system (OS). Think of Apple: its smartphone hardware gets the attention, but its business model is built around its OS and App Store. In the future, Volkswagen will offer largely standardised cars, with additional features then sold as software updates, thus enabling it to earn revenue from cars throughout their lives.
The embodiment of Volkswagen’s software-driven reinvention will be Project Trinity, the autonomous-ready long-distance electric cruiser due in 2026. It will use the group’s new SSP platform (which combines learnings from both the MEB and Audi-Porsche PPE architectures) and a new generation of Volkswagen’s bespoke OS.
However, Volkswagen “won’t wait for Trinity to become a software-driven company”. Over-the-air software updates for ID cars will start to appear in the coming months, and Brandstätter says: “With that, new ideas for business models will be created. It’s a ‘magic loop’: every 12 weeks, we want to create a software update and also emotions. Yes, we can do back-fixing with updates, but the emotional part is that you will notice you’re getting additional features that are developed within the lifetime of the car.”
Volkswagen’s new way of working
Volkswagen’s shift to focus on electric and digital technology will fundamentally change the way that it develops and builds cars.
“A wheel stays a wheel and a seat stays a seat,” says Thomas Ulbrich, who was named development boss earlier this year, “but the principles of how to develop a car will change from being hardware-led with a software influence to software-led with a hardware influence.”
That shift doesn’t quite require Volkswagen’s engineers to develop new skills, however, as Ulbrich says: “You had to stay curious for new technologies and open to what will come.”
Volkswagen has started ‘agile’ project development, pioneered with the ID model family, with smaller groups working to develop new tech more quickly. That includes the Project Artemis team working on Volkswagen’s future flagship.
“In the future, you will develop the software and bring the car around it,” explained Ulbrich. “Software has much faster evolution loops than hardware. So the hardware is the base, but it has to be flexible, because with software, we don’t yet know what the opportunities are for tomorrow.”
Who is Ralf Brandstatter?
Ralf Brandstätter first joined Volkswagen to train as a shopfitter at its factory in his native Brunswick, before going on to study industrial engineering. He joined the company full time in 1993, working on international projects in the procurement division, and later became an assistant to the board of management. In 1998, he was given responsibility for metal procurement for chassis and powertrain components, and in 2005 he switched to become head of components in Spain. A stint as Seat’s purchasing boss followed before he became head of Volkswagen Group procurement in 2010. He joined the Volkswagen brand board in 2015 and was made chief operating officer in 2018, before being promoted to his current role last year.