Tesla sets the bar for electric vehicles, VW CEO admit

November 01, 2021: -The CEO of Volkswagen Group has praised Elon Musk’s Tesla and welcomed the fact there will be competition between the two firms in the future. 

Earlier this month, Musk addressed V.W. executives via video link after being invited by Herbert Diess, who heads up the German automaker. Diess confirmed Musk’s appearance on Twitter and in a post on LinkedIn.

The Volkswagen Group, which is pursuing an electrification strategy, is headquartered in the German city of Wolfsburg. Elon Musk’s Tesla is building its Gigafactory Berlin-Brandenburg in Grünheide, a few hours’ drive from V.W.’s base.

“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.”

Diess’ comments were made after his firm posted earnings for the third quarter. Operating profit before exceptional items dropped by 12.1% to 2.8 billion euros, with the German automaker citing “supply issues.”

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

The shortage of semiconductors is not unique to Volkswagen. On Thursday, the Society of Motor Manufacturers and Traders said U.K. car production in September declined by 41.5% year-on-year.

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

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

While overall output was down, battery-electric, plug-in hybrid, and hybrid models accounted for 32.3% of cars made.

In July, the Volkswagen Group said half of its sales were expected to be battery-electric vehicles by 2030. By 2040, the company said almost 100% of its new cars in major markets should be zero-emission.

In March, a few months earlier, Diess dismissed the notion his firm could join forces with Tesla, telling CNBC that the German automotive giant was looking to go its way.

Volkswagen is one of several major automotive companies turning its attention to electric mobility. In July, another German firm, Daimler, said its Mercedes-Benz brand would “be ready to go all-electric at the end of the decade, where market conditions are allowed.”