Pablo di Si unexpectedly stepped down as head of the Volkswagen Group of America and will be replaced by Rivian executive Kjell Gruner, the automaker announced Tuesday. The move comes at a critical time for VW which has been struggling to move its all-electric models in the U.S., even as it prepares to launch the all-new, all-electric Scout brand.
Pablo Di Si left VW by his own choice, the automaker said.
Kjell Gruner will become CEO of Volkswagen Group of America, replacing Pablo Di Si whom, the automaker said, chose to step down “on his own request” last week.
Gruner is, a former Porsche executive who more recently has been part of Rivian’s senior management team. It’s unclear whether the shake-up is related to the news that VW and the California-based start-up last week formally locked down a $5.8 billion alliance.
The shake-up comes at a time when VW has been gaining ground in the U.S. market. But it has also been struggling to reverse a sharp downturn in sales of its all-electric ID.4. It is also preparing to launch an entirely new EV brand. Scout is set to launch its first two products in 2026 and will make extensive use of Rivian technology.
Di Si’s ups and downs
While VW sales have risen this year, the automaker has struggled with plunging demand for the ID.4 EV.
Di Si had a short tenure with VW’s North American arm, officially joining the group as CEO on September 1, 2022. That followed the launch of VW’s first long-range EV in the U.S., but the ID.4 has been struggling over the past year with declining sales. And, under Di Si, the automaker has postponed the launch of a second battery-electric model, the ID.7, until at least next year.
At the same time, overall U.S. sales have vigorously rebounded from the COVID pandemic, gaining 19% year-over-year for the first nine months of 2024. But that growth has come at a high price, tracking firm Motor Intelligence estimating the typical VW model sold in the U.S. this year has carried $4,165 in incentives.
Sales of Audi products, meanwhile, have faced a far tougher time this year. The largest of the VW Group’s luxury brands sold in the U.S. saw demand tumble 17%, year-over-year, through the end of September. Overall, VW Group of America sales were up 1.5% during the nine-month period.
Gruner set to “pursue the growth path”
Kjell Gruner gas been working in a senior management role at Rivian.
“We would like to thank Pablo Di Si, who, together with his local team, has made a lasting contribution to strengthening the American regions of our group,” VW Group CFO Arno Antlitz said in a statement announcing the management changes. “In Kjell Gruner, we have brought on board an experienced expert who knows the market and customers very well and will continue to consistently pursue the growth path we have embarked on.”
Gruner won’t officially start until December 12. Gerrit Spengler, the group’s human resources chief, will fill in until then.
Gruner already has some experience with Volkswagen, having previously worked at its Porsche operations before signing on at Rivian. With the latter company he has most recently been serving as chief commercial officer and president of business growth.
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Growing ties
The technology developed through the alliance will show up first on Scout products, CEO Scott Keogh, shown here, has confirmed.
The appointment of Gruner comes less than a week after Volkswagen and Rivian announced they had formally completed formation of a $5.8 billion partnership – first announced last spring. Under that arrangement the two companies will jointly work on the development of new software and EV electrical architectures – though Rivian is expected to take a lead in the development of that technology.
The product of that alliance will first show up on the two new Scout products – the Terra pickup and Traveler SUV – the new brand plans to launch in 2026, Scout CEO Scott Keogh announced.
For Rivian, the deal has several potential benefits. It could help the struggling start-up improve its economies of scale, lowering development and production costs. It also generates substantial new capital at a time when Rivian’s cash coffers have been shrinking. It feel significantly short of sales, revenue and earnings forecasts for the third quarter.
Challenges ahead for the new CEO
The American version of the ID.Buzz will be offered with a choice of rear-wheel or all-wheel-drive.
Gruner will face both some immediate challenges and long ones, as well.
To start with, he needs to find a way to kick-start demand for the ID.4 and figure out a formula for both building demand for the new ID.Buzz microbus and launching the delayed ID.7 and other planned EVs. That will get more complicated come January 2025 when the Trump administration returns to Washington. The next president’s team has signaled it will back off on EV mandates enacted under Pres. Joe Biden’s watch and may scale back or outright eliminate EV sales incentives. Proposed new tariffs could also create headaches, even for vehicles, like the ID.4, VW assembles in the U.S. because they still rely on a significant number of imported parts and components.
Add to that the ongoing contract negotiations between VW and the United Auto Workers Union. The UAW earlier this year won a major victory as workers at the Chattanooga assembly plant voted in favor of representation.
Another uncertainty is whether Gruner may decide to bring in his own management team. Among those current managers who might fall into his crosshairs are Andrew Savvas, Volkswagen’s U.S. sales chief, and Hein Schafer, senior vice president of sales operations.
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