VW pulls out Musk’s Twitter game sheet

It was an April Fool’s joke that went wrong. In an embarrassing apology, Volkswagen was forced to confirm in late March that its brand change in the United States to “Voltswagen” to adopt a fully electric future was a gimmick.

However, the erroneous announcement, which sparked an investigation by the Securities and Exchange Commission after coinciding with an increase in the group’s US shares, was in line with a social media strategy initiated at its German headquarters. from the vehicle manufacturer.

Last summer, VW CEO Herbert Diess told staff he wanted to be more vocal online. He considered that the group, which invests more than 35 billion euros in electrical technology, needed to attract the attention of Elon Musk, according to people close to senior management.

“Maybe we need a big boom,” is how one person familiar with the strategy described the approach, which involved Diess going to LinkedIn and then Twitter with increasingly provocative posts.

Diess is also active in Chinese Weibo, where he is hot on the heels of Tesla founder, who has been using social media for years to promote himself and his company, in terms of followers.

VW last year launched its first dedicated electric car, the ID.3, and sold nearly 232,000 battery-powered vehicles in 2020, making it the largest electric vehicle company in Europe in the process. By the end of the decade, it wants 70% of its sales in Europe to be emissions-free.

Despite these ambitions, the German company is worth less than a third of Tesla, which is building a factory just 150 miles from the VW Group base in Wolfsburg.

In an unusual move for the solid German business class, Diess has been involved in a series of tricks to make VW stand out.

The Bavarian wore a Batman mask while showing off one of the group’s cars in a LinkedIn post, posed for a selfie with Musk when he visited VW to test his ID.3 and, after starting- on Twitter earlier this year, he cheerfully mocked Tesla. executive, who had tried to recruit Diess when he was BMW manager.

The head of VW has also fought with online climate activists and politicians to find the best way to achieve carbon-neutral transportation.

The importance of this strategy is highlighted at a weekly social media planning meeting, chaired by Diess and which can last two hours, one person said. Analyzes of previous posts are detailed and potential “viral content” for the next few days is discussed.

Some say the tactic has helped gain more recognition at VW.

“Diess drew attention, because [Daimler boss Ola] Kallenius i [BMW’s Oliver] Zipse doesn’t come out here, ”said Michael Muders, a portfolio manager at Union Investment, one of VW’s seven major shareholders.

“You need a lot of money to master the transition,” he added. “That’s part of the game plan.”

The key to this plan is the ability to attract the attention of U.S. fund managers, who are much more focused on VW’s younger competitors. To achieve this goal, VW recently began making its quarterly press calls in English.

“After Dieselgate there was no interest from US investors,” said a person close to VW’s executive board. More than half of Diess’s Twitter followers are from the United States, they added.

With GM and Ford in the headlines of the dates when they will stop selling cars with combustion engines, VW is trying to highlight that it has advantages over its traditional competitors, in the form of dedicated electric platforms, one of which is licensed to Ford.

This technology “gives VW an edge over peers,” said Daniel Schwarz, an analyst at Stifel. “We now have the European Green Deal and VW’s strategy looks even more promising.”

Along with other events, such as a “Power Day” focused on battery technology designed to create an online buzz, VW’s online offensive has coincided with a sharp rise in the manufacturer’s stocks.

For a while this spring, the beetle maker once again wore the crown of Germany’s most valuable public company, despite having made no significant change in its already ambitious power plans, and almost regained ground. lost since the diesel emissions scandal in 2015.

Critically, though, it’s not clear how much Diess’s tweets help.

While VW shares have more than doubled since it hit the ten-year lows in March last year, Daimler shares have tripled over the same period, despite its Swedish executive reserved stays off Twitter.

“I use LinkedIn, because we’ve found it to be a very good tool for attracting talent to our company,” Kallenius told the Financial Times, “and I stick with that for now.”

If the distribution of shares, driven in part by a boom in vehicle demand, continues, German manufacturers will have to do more than deploy hashtags.

“Easy market money has probably been achieved,” Union Muders said. “The question is what are the margins of the electric vehicle business. That will be the focus of the market. “