German Auto Executives Admit Missteps, Signal a Strategic Reset

German automakers are in the middle of a course correction.

Since the global shift toward new energy vehicles began, “German brands” have often been labeled as rigid. This so-called “German stubbornness” at one point translated into a clear mismatch with the demands of the Chinese market.

“As long as they recognize the problem and commit to change, German carmakers still have enormous strength,” a Berlin-based automotive industry expert told Automotive Business Review.

Oliver Blume, CEO of Volkswagen Group and former CEO of Porsche, publicly acknowledged in January 2026 that making the second-generation Macan fully electric was a mistake. That decision cost Porsche a key sales pillar, and was closely linked to its sharp sales decline in China.

BMW, meanwhile, admitted in September 2025 that charging customers separately for seat heating was unreasonable. Even earlier, in February 2025, Audi officially announced it would abandon its controversial odd-even naming strategy for vehicle models—a decision that resurfaced as a hot topic in recent days, alongside renewed attention on comments by Audi CEO Gernot Döllner.

Audi China reaffirmed to Automotive Business Review that “this naming adjustment was officially announced on February 6, 2025. Its recent reappearance in discussions does not indicate any change to the decision.”

Looking back, these choices were shaped by multiple factors: following industry trends such as eliminating physical buttons in favor of full touchscreens, overly aggressive experimentation with new energy business models, and misjudgments about the balance between electric and combustion-engine vehicles.

Below are three major decisions that German automakers have now openly acknowledged as mistakes.

BMW: Charging for seat heating was a mistake

On February 4, 2026, Australian media outlet Drive reported that BMW had formally admitted that charging customers for seat heating was a wrong decision.

To understand this reversal, one must go back to September 2025 at the Munich Motor Show, where 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: “We’ve received criticism of our new energy vehicles, and much of it centers on seat heating. Charging for it was unreasonable.”

Although Drive did not disclose the spokesperson’s name, he explained that the original rationale was based on operational costs. “Some features require ongoing expenses, such as cloud services, which come with real costs.”

BMW does offer subscription-based services—like real-time traffic information—that rely on cloud connectivity and generate continuous data expenses. However, this pricing model was applied only outside China. Had BMW attempted to charge for seat heating in China, it would likely have faced overwhelming backlash.

Even earlier, in September 2023, then BMW board member Pieter Nota, responsible for sales and marketing, admitted in an interview with Autocar that subscriptions for hardware features such as seat heating had failed. “We thought we were offering flexibility, but customers felt they were paying twice for the same car,” he said.

Between 2020 and 2022, during the pandemic, BMW rolled out this subscription service in markets such as South Korea, the UK, and Germany. Owners found that while the heating hardware was already installed, the function was locked unless they paid around $18 per month or purchased permanent access.

BMW argued that the intent was to lower upfront purchase costs and give flexibility—allowing second-hand owners, for example, to activate seat heating temporarily during winter. Instead, the policy sparked outrage. Many consumers felt their property rights were being violated: if they owned the car outright, every component should belong to them.

BMW has since revised its strategy. Physical hardware features like seat and steering-wheel heating are no longer subject to post-purchase charges. Customers either select them when buying the car or receive them as standard equipment, with no remote locking afterward. Subscription fees now apply only to software and service features that require ongoing maintenance or cloud support, such as advanced driver assistance, parking services, and real-time traffic data.

Notably, intense competition in China has made such subscription models nearly impossible. Carmakers there not only bundle large screens and premium interiors, but often include smart driving features at no extra cost.

Audi: The odd-even naming strategy was a mistake

In a February 4, 2026 report by Motor1, Audi confirmed it would abandon the odd-even numbering strategy and return to a unified naming system for gasoline and electric models.

The strategy, announced in 2023, aimed to distinguish powertrains by numbers: even numbers for electric vehicles and odd numbers for combustion models. Under this plan, iconic names like A4 and A6 were reserved for electric cars, while gasoline versions would be renamed A5 and A7.

Audi believed this approach would clearly signal electrification and help customers instantly identify whether a model was electric or gasoline-powered. In practice, it backfired.

After less than two years—and following the launch of the new gasoline A5—Audi faced strong negative feedback. Management realized the strategy disrupted consumers’ long-established perception of model hierarchy. In the auto industry, higher numbers traditionally indicate larger size and higher positioning.

For example, renaming the gasoline A6 as A7 created confusion, since the A7 had long been associated with a higher-positioned Sportback model. Sales teams struggled to explain to customers that “this A7 is actually just the old A6, because it runs on fuel.”

The rushed renaming reflected Audi’s earlier assumption that gasoline vehicles would soon disappear. As global electrification has slowed, luxury brands now recognize that gasoline and hybrid models will remain relevant for years.

As a result, Audi concluded that electric and combustion vehicles should coexist under the same core model names. On February 6, 2025, Audi officially restored its naming system, using suffixes instead: e-tron for fully electric models, and TFSI or TDI for gasoline and diesel versions. This makes purchasing decisions far more intuitive for consumers.

Volkswagen: Eliminating physical buttons was a mistake

Volkswagen’s head of design Andreas Mindt delivered a memorable line in a March 2025 Autocar interview: “It’s not a phone. It’s a car.”

He openly admitted that Volkswagen’s push toward fully touch-based interiors was a mistake. In the pursuit of minimalism and a high-tech image, the brand removed physical buttons—including touch-sensitive steering wheels and sliders—at the expense of usability.

Mindt outlined a new “five physical controls” principle covering volume, seat adjustment, heating, airflow, and hazard lights. Future interiors, he said, will prioritize intuitive and user-friendly design rather than forcing drivers to adapt to touchscreens.

This touch-only approach was largely driven by former CEO Herbert Diess, who sought to cut costs and emulate Tesla’s minimalist style. Models like the eighth-generation Golf and early ID series suffered from accidental inputs, unlit touch sliders at night, and essential functions buried deep in screen menus.

Volkswagen has since acted decisively. The ID.2all concept car, led by Mindt, showcases a return to illuminated physical buttons and rotary knobs that allow blind operation. Production models have followed suit: the updated Golf has already ditched the touch-sensitive steering wheel in favor of traditional buttons.

Regulators have also stepped in. Euro NCAP announced that from 2026, vehicles lacking physical controls for five core functions—turn signals, hazard lights, horn, wipers, and SOS—will struggle to achieve a five-star safety rating.

In China, new mandatory standards on vehicle door handle safety have further reinforced the shift away from hidden or fully touch-based designs, a trend underscored by ongoing legal challenges faced by Tesla over concealed door handles.

Finally, it is worth noting that Volkswagen’s new energy vehicle operations in China are now fully localized, with Chinese teams making independent decisions. As a result, products for the Chinese market increasingly differ from those in Europe and other regions.