The five year-long and $50bn investment in electric vehicles by Volkswagen (VW) and led by CEO Herbert Diess hit a significant speed bump last year when it launched its answer to Tesla, the ID.3. The software didn’t work as advertised, and the German car giant learned how the future of the auto industry will increasingly hinge on an ability to execute well on software, not hardware.
VW’s struggles with electric vehicles and the global chip shortage that prompted Audi to furlough 10,000 workers this past week are unambiguous indicators of how much an industry that once was defined by hardware is now defined by digital technology.
The VW story is very much a digital transformation story that chronicles the struggles of a traditional car company to make the technological leap. As Cyberhedge sees across all sectors, the future winners and losers in the car industry will be defined by how well or poorly companies execute the transition and ultimately manage their technology.
Both the VW EV software problems and Audi’s chip shortage also highlight how a disruption to digital technology has an immediate impact on financials because of the direct impact technology has on productivity.
Investors are looking to see what companies can most quickly elevate EV production in the coming years to rival Tesla. They should also be looking at other indicators of how well or poorly any company is managing their digital transformation. The Cyberhedge Indices provide the only market-validated indicator of good versus bad.