A New Future With New Friends

A New Future With New Friends

Tesla and Volkswagen have long been considered rivals in the auto manufacturing industry. However, recent events show the tide is changing regarding their relationship. As we reported this week, Tesla boss, Elon Musk embarked on a three-day visit to Germany, which included stops at the pharmaceutical company, CureVac, a meeting with politicians in Berlin, and of course, a visit to see the construction progress of Gigafactory 4. Musk did have a final stop on his trip that was kept under the radar, until now.

On Thursday evening, at a small airport in Braunschweig, VW CEO, Herbert Diess met with the Tesla CEO. In the two-hour meeting, Musk was given the opportunity to test drive Volkswagen’s ID.3 electric car and inspect the ID.4 electric SUV that’s expected to be launched in the latter part of 2020. Diess praised the American-based EV carmaker in a LinkedIn post saying that Tesla’s new factory brings “trend-setting future automotive technology” to Germany. “Tesla will live up the competition in Germany and accelerates the transformation of our established industry significantly,” he said.

While it’s all smiles and handshakes now, the two companies have not always seen eye to eye. Volkswagen got a bad rap between 2008 and 2015 with violating the EPA’s Clean Air Act when they consciously placed cheat devices in their vehicle’s emissions systems. The scandal was infamously known as Dieselgate and tarnished VW’s reputation in the minds of the environmentally conscious.
At one point the Tesla CEO indirectly took a swipe at the German auto manufacturer through Twitter:

Good thing gas/diesel carmakers didn’t cheat on their emissions or we’d be in real trouble.

However, Musk had to deal with a Volkswagen employee, using a fake name to criticize Tesla, but Diess was reported to have handled the situation.

But tensions have eased and Musk lauded Diess last year by saying, "Herbert Diess is doing more than any big carmaker to go electric. The good of the world should come first. For what it’s worth, he has my support."

Since then, both auto execs appeared on stage together at the Golden Steering Wheel Awards in Berlin last November, exchanging compliments. It was evident that although they had issues in the past, their professional friendship had taken a healthy turn. And it was at that same evening when Elon Musk announced that Tesla is going to build a new EV production facility in Berlin. That didn’t seem to bother the VW CEO and their relationship has continued to grow.

And now Diess is getting Musk to have a first-hand look at its latest electric car innovations. Collaborations are rare in the automotive industry but we’re seeing how both Tesla and Volkswagen can help each other to improve their businesses. Volkswagen has been a pioneer in car manufacturing since 1937. So, with eighty-five years of market data, VW could certainly give Tesla valuable insight with penetrating the German car market. And with Tesla leading in the EV industry, it could share a lot to help the German company get up to speed with its electric vehicle design and production.

Musk has made it clear that he is more than willing to help electric fleets come to life, and not just for Tesla. As he tweeted in July this year,

“Tesla is open to licensing software and supplying powertrains & batteries. We’re just trying to accelerate sustainable energy, not crush competitors!”

Whether these top companies end up helping each other or not, we will have to wait and see. But it’s good to see the alliance grow which will accelerate the move to sustainable energy for everyone.