German Automotive Executives Publicly Admit Strategic Missteps

German automakers are recalibrating their course.

Since the global shift toward new energy vehicles began, “German brands” have often been labeled as stubborn. This so-called “German rigidity” gradually turned into a misalignment with the fast-changing demands of the Chinese market.

“As long as they recognize the problem and truly commit to change, German automakers still have tremendous strength,” an automotive industry expert based in Berlin told Auto Business Review.

Oliver Blume, CEO of Volkswagen Group and formerly CEO of Porsche, publicly admitted in January 2026 that making the second-generation Macan fully electric was a strategic mistake. That decision cost Porsche a major sales pillar, and the sharp downturn in the Chinese market was closely linked to this misjudgment.

In September 2025, BMW acknowledged that charging separately for seat heating was unreasonable. Even earlier, in February 2025, Audi officially announced it would abandon its controversial “odd–even number” naming strategy for vehicles—a decision that resurfaced in public discussion recently alongside remarks from Audi CEO Gernot Döllner. Audi China reiterated to Auto Business Review that the naming policy had already been formally reversed on February 6, 2025, and that renewed discussion did not signal any further change.

Looking back, many of these decisions were shaped by industry trends at the time—such as eliminating physical buttons in favor of full touchscreens—by overly ambitious experimentation with new energy business models, and by unclear judgments about the balance between electric and internal-combustion vehicles.

Below are three major strategic missteps that German automakers have openly acknowledged.

BMW: Charging for seat heating was a mistake

On February 4, 2026, Australian outlet Drive reported that BMW admitted charging for seat heating was the wrong call.

This admission traces back to September 2025, during the Munich Motor Show, when BMW hosted an international media test drive of the iX3, the first model built on its Neue Klasse electric platform.

During the event, a BMW spokesperson told journalists that feedback on new energy vehicles had focused heavily on dissatisfaction with seat-heating charges, calling the practice unreasonable. The spokesperson explained that the original rationale was to cover operational costs tied to other services, such as cloud connectivity.

BMW offers several subscription-based services, including real-time traffic information that requires ongoing data usage, increasing operating costs. Notably, this charging model was applied only outside China—where such a move would likely have triggered overwhelming backlash.

Earlier still, in September 2023, then BMW board member for sales and marketing Pieter Nota acknowledged in an interview with Autocar that subscription fees for hardware features like seat heating had failed.

“We thought we were offering pricing flexibility, but consumer acceptance was very low. Customers felt they were paying twice for the same car,” he said.

Between 2020 and 2022, BMW rolled out the service mainly in markets such as South Korea, the UK, and Germany. Owners discovered that the heating hardware was already installed, yet the function was disabled unless they paid an additional monthly fee or bought permanent access.

BMW argued that the intent was to lower purchase barriers, allowing second-hand buyers to activate seat heating only when needed. Instead, the move sparked strong consumer anger, with many calling it a violation of ownership rights.

BMW has since revised its policy. Hardware-based functions—such as seat and steering-wheel heating—are no longer subject to post-purchase fees. These features are now either standard or optional at purchase and remain permanently available once delivered. Subscription models are retained only for software or service-based features requiring ongoing maintenance or cloud support, such as advanced driver assistance or live traffic services.

In China’s hyper-competitive market, however, even these subscription models are difficult to sustain, as automakers increasingly bundle both hardware and intelligent features at no extra cost.

Audi: The odd–even naming strategy was a mistake

On February 4, 2026, Motor1 cited comments from Gernot Döllner confirming that Audi would abandon its odd–even naming strategy and return to using the same model names for both electric and combustion vehicles.

Introduced in 2023, the strategy aimed to distinguish powertrains by number: even numbers for electric models and odd numbers for combustion vehicles. This meant iconic nameplates like A4 and A6 would be reserved for EVs, while their gasoline counterparts would be renamed A5 and A7.

The logic was to “save” flagship names for electric models and make powertrain differences immediately obvious. However, the strategy lasted less than two years. With the launch of the new combustion A5, Audi faced widespread criticism.

Management eventually recognized that the approach disrupted long-established perceptions of vehicle hierarchy. In the automotive world, higher numbers traditionally signal larger size and higher positioning. Renaming a combustion A6 as an A7 confused customers and complicated sales explanations.

The rushed renaming reflected Audi’s earlier aggressive assumption that combustion engines would disappear quickly. As global electrification slowed, luxury brands acknowledged that combustion and hybrid vehicles would remain relevant for much longer.

Audi concluded that if electric and combustion vehicles must coexist, they should share the same brand equity. Since February 6, 2025, Audi has officially reverted to unified naming, using suffixes such as e-tron for electric models and TFSI/TDI for combustion vehicles—making choices clearer for consumers.

Volkswagen: Eliminating physical buttons was a mistake

Volkswagen’s head of design Andreas Mindt summed it up in a 2025 interview with Autocar: “It’s not a phone—it’s a car.”

He openly admitted that full touchscreen interiors were a misstep. In pursuing minimalism and a high-tech image, Volkswagen removed physical buttons, including touch-sensitive steering wheels and sliders, severely harming usability.

Mindt established a new “five physical buttons” rule—covering volume, seat adjustment, heating, airflow, and hazard lights—and pledged that future interiors would prioritize intuitive, user-friendly design over forced touchscreen interaction.

The touch-only approach stemmed from the era of former CEO Herbert Diess, when Volkswagen sought cost savings and a Tesla-like minimalist aesthetic. The result was frequent accidental inputs, poor nighttime usability, and buried climate controls.

Volkswagen has since acted decisively. The ID.2all concept previews a return to illuminated physical buttons and tactile knobs, enabling safe “blind operation.” Updated production models, including the latest Golf, have already reinstated traditional steering-wheel buttons.

Regulators have also intervened. Euro NCAP announced that from 2026, vehicles lacking physical controls for five critical functions will struggle to earn five-star safety ratings. China has likewise issued mandatory standards addressing hidden door handles, widely seen as a rejection of fully concealed designs.

It is also worth noting that Volkswagen’s new energy vehicles in China are now fully localized, developed by local teams, and increasingly distinct from European offerings—reflecting a broader shift toward market-specific decision-making.

Together, these admissions mark a rare but significant moment: German automakers are no longer defending past choices—they are actively correcting them.