Tesla is setting the bar for electric vehicles, VW CEO admits

A Volkswagen ID.4 on display screen at a push occasion in Germany on Oct 26, 2020.

Peter Steffen | image alliance | Getty Images

The CEO of Volkswagen Team has praised Elon Musk’s Tesla and welcomed the reality there will be levels of competition concerning the two firms going forward.  

Earlier this thirty day period, Musk addressed VW executives by using video clip connection soon after remaining invited to do so by Herbert Diess, who heads up the German automaker. Musk’s visual appearance was verified by Diess on Twitter and in a write-up on LinkedIn.

“I very significantly enjoy it that he confirmed up — I assume we experienced a wonderful dialogue,” Diess, who was speaking to CNBC’s Julianna Tatelbaum on Thursday, reported.

“And we have to acknowledge that Tesla sets the new benchmarks [on] … the EV side,” Diess added. “Not only technologies smart, but also when it comes to productivity, pace … I feel it really is always great to have competition.”

The Volkswagen Group, which is pursuing an electrification strategy, is headquartered in the German metropolis of Wolfsburg. Elon Musk’s Tesla is constructing its Gigafactory Berlin-Brandenburg in Grünheide, a few hours’ drive from VW’s foundation.

Read through much more about electrical autos from CNBC Professional

“I really much respect that he is coming to Germany,” Diess stated. “He will challenge us, but we will test to follow as rapid as doable.”

Diess’ remarks were being produced following his firm posted earnings for the third quarter. Running earnings before special products dropped by 12.1% to 2.8 billion euros ($3.25 billion), with the German automaker citing “offer difficulties.”

In a assertion, the firm stated: “The world semiconductor bottlenecks specifically impacted on the business enterprise performance of the Volkswagen Group in the third quarter.”

The shortage of semiconductors is not exceptional to Volkswagen. On Thursday, the Society of Motor Producers and Traders mentioned U.K. automobile generation in September declined by 41.5% calendar year-on-calendar year.

“Output continues to be hampered by the manufacturing stoppages brought about by the ongoing world-wide shortage of semiconductors as well as the decline of output potential arising from the closure of 1 of the UK’s bigger vegetation,” the SMMT claimed.

A whole of 67,169 cars had been manufactured previous thirty day period, the marketplace entire body mentioned. This represented “the worst undertaking September due to the fact 1982.”

When over-all output was down, the output of battery electric powered, plug-in hybrid and hybrid designs accounted for 32.3% of cars and trucks designed.

Electrical targets  

Back in July, the Volkswagen Team mentioned half of its income had been envisioned to be battery-electrical autos by 2030. By the yr 2040, the company said nearly 100% of its new vehicles in main marketplaces ought to be zero-emission.

A handful of months before, in March, Diess dismissed the idea his company could sign up for forces with Tesla, telling CNBC that the German automotive huge was on the lookout to go its personal way.

Speaking to “Squawk Box Europe” at the time, he was questioned if he would rule out any future deal with Elon Musk’s electrical car maker, in which VW could manufacture its cars and trucks, or if the Tesla and VW makes would ever unite.

“No, we haven’t thought of [that], we are heading our very own way,” he replied. “We want to get close and then overtake.”

“We consider that we can – we will need our possess program stack, our have technological know-how,” he additional. “And also, I imagine Tesla, or Elon, is pretty substantially thinking … [about] his way ahead. So no, there are no talks in between Elon Musk and myself concerning joining forces.”

Volkswagen is one of a number of key automotive organizations turning its focus to electric powered mobility. In July yet another German business, Daimler, stated its Mercedes-Benz model would “be completely ready to go all electrical at the end of the ten years, exactly where marketplace circumstances make it possible for.”

—CNBC’s Chloe Taylor contributed to this report