Can Elon Musk help Volkswagen be more like Tesla?

Volkswagen Group CEO Herbert Diess understands the electric wave that’s building, and unlike most other auto industry leaders, he’s taking bold steps to make sure his company rides it. Diess made some waves of his own a few weeks ago, when he called 120 top-level managers to company HQ for a crisis meeting, and told them VW needs to transform its factories in order to catch up with Tesla. More recently, Diess caused even more turbulence in the auto world when he took the daring step of inviting Tesla CEO Elon Musk to address 200 Volkswagen executives via a video call. 

Above: Elon Musk and Herbert Diess (Source: Herbert Diess / LinkedIn)

Diess said he brought in Musk as a surprise guest to the managers’ meeting in Alpbach, Austria in order to emphasize the point that VW needs to move faster to make the transition to e-mobility, which Diess called the biggest transformation in VW’s history. He wants VW to have “faster decisions, less bureaucracy, more responsibility.”

The productivity gap between the upstart and the elder statesman is stark. When Tesla’s Giga Berlin cranks up the line, which is expected to happen by the end of this year, it will set new standards for vehicle production. According to a recent report in Business Insider (German), Tesla can build a Model 3 in ten hours, more than three times as quickly as VW builds an ID.3 at its Zwickau EV plant.

Diess himself said that Tesla has handled the current global chip shortage better than legacy automakers because its software team was able to rewrite Tesla’s software in only two to three weeks in order to enable a switch to another, more readily available type of microchip. 

Twitter: Herbert Diess

Handelsblatt reports (via Reuters) that Musk praised VW in his speech, and called it Tesla’s greatest challenger. When Diess asked why Tesla is so much nimbler than its rivals, Musk responded, “It’s the management style. I’m primarily an engineer and, besides the car, I’m fascinated by supply chains, logistics and production processes.” (Of course, Tesla’s overriding Silicon Valley ethos, and many other brilliant team members, have a lot to do with the company’s innovative excellence.)

Diess said on Twitter that VW would continue its dialogue with Tesla. “We will visit you soon in Grünheide.”

Diess’s decision to invite Musk drew a few flames on Twitter, from croakers who dislike Elon Musk, or who believe that the move showed weakness that will damage VW’s brand. However, the vast majority of reactions to the unprecedented reach-out appear to be positive.

As Electrek’s Jameson Dow put it, we’re all on “team electric.” The real competition is not among different EVs, but between the electric future and the smoke-belching past. EV producers (and EV journalists) may compete, but we also need to cooperate to accelerate the end of the Oil Age.


This article originally appeared in Charged. Author: Charles Morris. Sources: Reuters, Electrek