VW CEO Diess warns car factories are at risk from power supply shutdown

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Volkswagen Group CEO Herbert Diess has warned that the abandonment of Russian energy is not happening fast enough to protect the German automaker from a sudden halt in natural gas deliveries.

VW will retain the ability to run its power plants with coal instead of gas due to Germany’s reliance on Russian imports, Diess said in an interview for the Qatar Economic Forum in Doha.

While progress has been made in supplying liquefied natural gas to the United States and other countries, building the necessary infrastructure will take time.

“It’s probably not moving fast enough” to deal with a major disruption, Diess told Bloomberg Television’s Anna Edwards. “In the long term, I am sure that we will become independent from Russian gas.”

Diess has spearheaded major changes at VW to make the automaker more nimble and challenge Tesla as the top maker of electric vehicles. The company has introduced new battery-powered models, is moving forward with a plan to add an electric vehicle factory near its Wolfsburg headquarters and is building a full battery supply chain.

As the war in Ukraine, rising interest rates and inflation weigh on investors’ risk appetite, Diess said he does not yet see demand destruction in the auto sector. VW has EV orders scheduled for “about a year” and is optimistic that it will meet its 2022 targets.

“We don’t see customer demand dropping right now, but that could change,” he said.

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