Diess worked out a deal to cut 30,000 jobs through attrition, which left Volkswagen's profitability still lagging competitors.
In the end, Diess appears to have moved too fast for some on the company's supervisory board, and not fast enough for others.
He clashed repeatedly with Volkswagen's labor leaders, who have half the votes on the automaker's supervisory board. But members of the Porsche and Piech families, major shareholders, were concerned that Diess was not delivering results fast enough from his multi-billion euro investments in EVs and software development.
In May, Volkswagen's supervisory board demanded that management present a more robust plan for CARIAD, the software unit.
The unit's chief earlier this month told Germany's Frankfurter Allgemeine Zeitung that the operation needed to be streamlined to move faster.
Volkswagen's share price suggests investors had similar concerns. Since Diess took over in 2018, Volkswagen shares have been flat, and are down 24 percent for this year.
Tesla in that same four years has increased its market value by 15 times its 2018 level, and at a market capitalization of $844 billion is worth 10 Volkswagens.
Car guy coming in
Diess will leave VW Group on Sept. 1, three years before his contract was supposed to end, with many of the goals he set as the German auto giant's disruptor-in-chief unfinished and uncertain.
The group's board has opted to replace Diess with Porsche CEO Chief Oliver Blume, a veteran VW executive. Some observers expect that choice signals a return to basics, and less ambitious visions about turning the automaker into a technology company.
Diess "had a much broader vision about just the car. That obviously created certain friction," Silicon Valley venture capitalist Evangelos Simoudis said of Diess.
"When I see Blume coming in, I see a car guy coming in again."
Diess initiated an ambitious push into battery-cell production and got backing for the IPO of Porsche, which is planned for the fourth quarter.
At the same time, he occasionally allowed friction with VW’s unions and other stakeholders to spill over into public. He likened VW to a "tanker" with "old, encrusted structures" in need of breaking up, vowing to modernize the company and move more quickly.