Volkswagen CEO says he wants to ‘get close and then overtake’ Tesla

The underbody of an ID.3 electric vehicle will be assembled on January 29, 2021 at a Volkswagen plant in Dresden.

Matthias Rietschel | Image Alliance | Getty Images

The Volkswagen Group’s CEO has rejected the idea that his company could partner with Tesla, telling CNBC that the German automotive giant wants to go its own way.

In an interview with Squawk Box Europe on Tuesday, Herbert Diess was asked whether he would rule out a future contract with Elon Musk’s electric car manufacturer, in which VW could manufacture its cars, or whether the Tesla and VW brands would ever merge.

“No, we haven’t thought about it, we’re going our own way,” he replied. “We want to get closer and then overtake.”

“We believe we can – we need our own software stack, our own technology,” he added. “And I also think that Tesla or Elon think a lot about their way forward. So no, there are no discussions between Elon Musk and me about joining forces.”

The shift in focus to electric vehicles comes at a time when authorities around the world are trying to increase the number of low-emission and zero-emission vehicles on their roads in an attempt to tackle air pollution and move away from the internal combustion engine.

For example, the UK has announced plans to stop selling new diesel and gasoline vehicles and vans from 2030. The European Commission’s “Strategy for Sustainable and Intelligent Mobility” now aims to have at least 30 million zero-emission cars on the road by 2030.

With this in mind, VW and many other major automakers want to compete with Elon Musk’s Tesla and eventually challenge him.

On Monday, VW announced plans to build six “Gigafactory” in Europe by the end of the decade and to expand the charging infrastructure in Europe, North America and China.

In the battery sector, the company, headquartered in Wolfsburg, will also concentrate on the development of a “new uniform cell”, which will be introduced in 2023 and used in up to 80% of the group’s electric vehicles by 2030.

In his interview with CNBC, Diess said that in the next 15 years electric cars would take the lead and software would become the main driver of the automotive industry. He also predicted that cars would become autonomous within the same timeframe.

“Managing this change is probably the most important task we face,” he said. “And we think we’re on the way, we’re making good progress.”

Diess was also optimistic about the gap between what Tesla and European automakers are doing and whether it can be bridged.

“I think so because you know the race is open – this is not the industry you can hit in a few years, this is not technology,” he said.

“So you need life cycles, you need products, you need plant capacity, you need market, you need to win customers’ trust,” he added.

“So that’s a long run and yes, there are some startups that we’re watching closely and Tesla is sure … at the top in some ways. But we’re not that far behind and we’re gaining momentum.”

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