It was an April Fool’s joke that went wrong. In an embarrassing apology, Volkswagen was forced to confirm in late March that its US rebranding to “Voltswagen” to embrace an all-electric future was a stunt.
Yet the botched announcement, which prompted a Securities and Exchange Commission probe after coinciding with a surge in the group’s US shares, was in tune with a social media strategy set in motion at the carmaker’s German headquarters.
Last summer, VW chief executive Herbert Diess told staff he wanted to be more vocal online. He felt the group, which is investing more than €35bn in electric technology, needed to wrestle back attention from the likes 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 taking to LinkedIn and then Twitter with ever more provocative posts.
Diess is also active on China’s Weibo, where he is hot on the heels of the Tesla founder — who has used social media for years to promote himself and his company — in terms of followers.
VW launched its first dedicated electric car, the ID.3, last year, and sold almost 232,000 battery-powered vehicles in 2020, becoming Europe’s largest electric vehicle company in the process. By the end of the decade, it wants 70 per cent of its sales in Europe to be emissions-free.
Despite such ambitions, the German company is worth less than a third of Tesla, which is building a factory just 150 miles away from VW Group’s base in Wolfsburg.
In an unusual move for Germany’s staid corporate class, Diess has engaged in a series of stunts to get VW noticed.
The Bavarian donned a Batman mask while demonstrating one of the group’s cars in a LinkedIn post, posed for a selfie with Musk when he visited VW to test the ID.3, and after joining Twitter at the start of the year, playfully taunted the Tesla executive, who had tried to recruit Diess when he was a BMW manager.
The VW boss has also sparred with climate activists and politicians online, over the best way to achieve carbon neutral transport.
The importance of this strategy is underlined by a weekly social media planning meeting, which is chaired by Diess and can last for two hours, one person said. The analytics of previous posts are pored over and potential “viral content” for the days ahead is discussed.
Some say the tactic has helped get VW more recognition.
“Diess got some attention, because [Daimler boss Ola] Kallenius and [BMW’s Oliver] Zipse are not going out there,” said Michael Muders, a portfolio manager at Union Investment, a top seven VW shareholder.
“You need a lot of money to master the transition,” he added. “This is part of the game plan.”
Key to this plan is the ability to attract the attention of fund managers in the US, who are much more focused on VW’s younger competitors. In pursuit of this goal, VW recently started doing its quarterly press calls in English.
“After Dieselgate there was no interest from American investors,” said a person close to VW’s executive board. More than half of Diess’ Twitter followers are from the US, they added.
With GM and Ford making headlines for naming dates when they will stop selling combustion engine cars, VW is attempting to stress that it has an edge on its traditional competitors, in the form of dedicated electric platforms, one of which is licensed to Ford.
This technology “gives VW a lead over peers”, said Daniel Schwarz, an analyst at Stifel. “Now we 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 a buzz online, VW’s online offensive has coincided with a sharp rise in the manufacturer’s stock.
For a short while this spring, the Beetle-maker once again wore the crown of Germany’s most valuable public company, despite no significant shift in its already ambitious electric plans, and almost regained the ground lost since the diesel emissions scandal in 2015.
Critically, though, it is unclear how much Diess’ tweets are helping.
Although VW’s shares have more than doubled since hitting 10-year lows in March last year, Daimler’s stock has tripled over the same period, despite its reserved Swedish chief executive staying off Twitter.
“I use LinkedIn, because we have found out that that’s a very good tool to attract talent to our company,” Kallenius told the Financial Times, “and I’m sticking with that for now.”
If the share rally — boosted in part by a boom in car demand — is to keep going, German carmakers will probably have to do more than deploy hashtags.
“The easy money in the market has probably been made,” said Union’s Muders. “The question is what are the margins in the electric vehicle business. That will be the focus of the market.”