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World NewsTesla is setting the bar for electric vehicles, VW CEO admits

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

A Volkswagen ID.4 on show at a press occasion in Germany on October 26, 2020.

Peter Steffen | image alliance | Getty Images

The CEO of Volkswagen Group has praised Elon Musk’s Tesla and welcomed the truth there will likely be competitors between the two companies going ahead.  

Earlier this month, Musk addressed VW executives via video link after being invited to take action by Herbert Diess, who heads up the German automaker. Musk’s look was confirmed 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, who was talking to CNBC’s Julianna Tatelbaum on Thursday, stated.

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

Read extra about electric autos from CNBC Pro

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

Diess’ feedback had been made after his agency posted earnings for the third quarter. Operating revenue earlier than particular objects dropped by 12.1% to 2.8 billion euros ($3.25 billion), with the German automaker citing “supply issues.”

In a press release, the firm stated: “The global semiconductor bottlenecks particularly impacted on the business performance of the Volkswagen Group in the third quarter.”

The scarcity of semiconductors is not distinctive to Volkswagen. On Thursday, the Society of Motor Manufacturers and Traders stated U.Ok. automotive manufacturing in September declined by 41.5% year-on-year.

“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 stated.

A complete of 67,169 automobiles had been manufactured final month, the trade physique stated. This represented “the worst performing September since 1982.”

While general output was down, the manufacturing of battery electric, plug-in hybrid and hybrid fashions accounted for 32.3% of automobiles made.

Electric objectives  

Back in July, the Volkswagen Group stated half of its gross sales had been anticipated to be battery-electric autos by 2030. By the yr 2040, the firm stated virtually 100% of its new autos in main markets ought to be zero-emission.

Just a few months earlier, in March, Diess dismissed the notion his agency may be a part of forces with Tesla, telling CNBC that the German automotive large was trying to go its personal method.

Speaking to “Squawk Box Europe” at the time, he was requested if he would rule out any future cope with Elon Musk’s electric automotive maker, by which VW may manufacture its automobiles, or if the Tesla and VW manufacturers would ever unite.

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

“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.”

Volkswagen is considered one of a number of main automotive firms turning its consideration to electric mobility. In July one other German agency, Daimler, stated its Mercedes-Benz model would “be ready to go all electric at the end of the decade, where market conditions allow.”

—CNBC’s Chloe Taylor contributed to this report

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