VW CEO Believes The Bar For Electric Vehicles Is Being Set By Tesla

While showering praises for Elon Musk’s Tesla, the CEO of Volkswagen Group also welcomed the idea that the two companies would compete in the future.

After being requested by the German automaker’s CEO, Herbert Diess, Musk spoke to VW officials via video conference earlier this month.

Musk’s presence was verified by Diess on Twitter and in a post on LinkedIn.

“I very much appreciate it that he showed up — I think we had a nice dialogue,” Diess said on Thursday in a television interview.

“And we have to accept that Tesla sets the new benchmarks [on] … the EV side,” Diess added. “Not only technology-wise but also when it comes to productivity, speed … I think it’s always good to have competition.”

The headquarters of the Volkswagen Group in Wolfsburg, Germany, and the largest European automaker is pursuing an electrification strategy. Tesla is constructing its Gigafactory Berlin-Brandenburg near Grünheide, a few hours’ drive from VW’s headquarters.

“I very much appreciate that he’s coming to Germany,” Diess said. “He will challenge us, but we will try to follow as fast as possible.”

These remarks were made by Diess following the release of his company’s third-quarter earnings. The German manufacturer cited “supply issues” for the 12.1 per cent decline in its operating profit before special items which came in at 2.8 billion euros ($3.25 billion).

“The global semiconductor bottlenecks particularly impacted on the business performance of the Volkswagen Group in the third quarter,” the company said in a statement.

Volkswagen is not alone in experiencing a semiconductor shortage in the global automobile industry. Automobile manufacturing in the United Kingdom fell 41.5 per cent year on year in September, said the Society of Motor Manufacturers and Traders on Thursday.

“Output continues to be hampered by the production stoppages caused by the ongoing global shortage of semiconductors as well as the loss of production capacity arising from the closure of one of the UK’s larger plants,” the SMMT said.

The industry body said that 67,169 cars were manufactured last month in total. This represented “the worst performing September since 1982.”

By 2030, the Volkswagen Group expects that half of all its car sales will be battery-electric vehicles, according to a statement released in July by the company. Nearly all of the company’s new vehicles in its key markets should be zero-emission by 2040, according to the target set for itself by the company.

Diess had previously dismissed the possibility of his company collaborating with Tesla, as he had commented in March this year that Volkswagen preferred to operate on its own.

“No, we haven’t considered [that], we are going our own way,” he replied. “We want to get close and then overtake”, Diess had said when he was asked whether he would completely eliminate any possibility in the future of working together with Elon Musk’s electric vehicle company.

“We think that we can – we need our own software stack, our own technology,” he added. “And also, I think Tesla, or Elon, is very much thinking … [about] his way forward. So no, there are no talks between Elon Musk and myself regarding joining forces.”

(Adapted from CNBC.com)


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