Volkswagen CEO Diess dismisses tie-up notion – “We want to get close to Tesla, and then overtake them”

Volkswagen Group CEO Herbert Diess has dismissed the notion of tying up with Tesla for the manufacture of electric vehicles, CNBC reported. “No, we haven’t considered that, we are going our own way,” the CEO said in response to a question on Squawk Box Europe with regard to the possibility of any future deal with the American electric vehicle maker.

“We want to get close (to where Tesla is) and then overtake. We think that we can; we need our own software stack, our own technology, and 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,” Diess said.

The Volkswagen Group CEO foresees electric vehicles taking the lead in the industry in the next 15 years, with software becoming the core driver of the automotive industry, and also predicted that cars will become autonomous in the same timeframe. “To manage this change is probably the most important task we are facing, and I think we are on the way and making progress,” he explained.

Earlier this week, Volkswagen announced that it plans to have a total of six battery cell factories up and running in Europe by 2030, with the capacity to produce cells with a total energy value of 240 gigawatt-hours per year combined.

The first two plants will be in Skellefteå, Sweden and in Salzgitter, Germany, with the Skellefteå plant to commence production in 2023 and the Salzgitter plant to produced the unified cells from 2025. Both will be gradually expanded to reach an annual capacity of 40 GWh, and both will use electricity from renewable sources. Potential sites and partners are currently being considered for the other factories, said Volkswagen.

Can the established European car manufacturers close the gap to Tesla in the EV realm? Diess thinks so too. “The race is open. This is not the industry which you can conquer within a few years or so – this is not [the tech industry]. So, you need life cycles, product, plant capacities, market, as well as to earn the trust of the customer,” Diess noted.

In short, Diess see the path towards EV growth as one that requires the long view, at the same time acknowledging that there are other firms which have gotten the jump on the establishment. “There are a few startups which we are watching closely and Tesla for sure is in the lead in some aspects. But we are not so far behind, and we are gaining momentum,” the German automaker’s CEO said.

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