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Volkswagen CEO Oliver Blume is entering a defining year as investors intensify pressure on him to reverse the automaker’s decline in China and close a widening technology gap with global rivals. These two challenges are widely seen as the core tests that will determine whether Blume can successfully lead a turnaround at the German car giant.
After stepping down from his dual role as CEO of both Volkswagen and Porsche in January, Blume received a vote of confidence through a five-year contract extension as group CEO. However, investors who have watched Volkswagen and Porsche lose a combined 48 billion euros in market value during his tenure now expect tangible progress. With Porsche no longer dividing his attention, patience among shareholders is thinning.
Volkswagen’s struggles in China, once its most profitable market, remain a central concern. The company was overtaken by BYD in 2024 and has since fallen behind another domestic rival, Geely. Premium brands Audi and Porsche have also lost ground. Blume has responded with an “in China for China” strategy, shifting vehicle development and key technologies to the local market and partnering with Chinese players to better meet consumer preferences. While some investors see this as a promising step, others worry that labor resistance in Germany could complicate plans to export China-made vehicles abroad.
At the same time, Volkswagen’s long-standing software shortcomings have become a major investor focus. Years of delays at its in-house unit Cariad forced Blume to seek external solutions, leading to a $5 billion joint venture with U.S. electric vehicle maker Rivian. The partnership aims to develop a next-generation software and electronics platform for Western markets, with winter testing under way and further investment contingent on results.
Better-than-expected 2025 cash flow has provided cautious optimism, but shareholders and controlling families alike are watching closely. With past leadership changes still fresh in memory, Blume’s ability to deliver on China recovery and software innovation will be critical in determining Volkswagen’s future competitiveness and his own tenure at the helm.
