Tesla, the world’s leading electric vehicle manufacturer, is moving at twice the speed than its competitors, said Herbert Diess, CEO of Volkswagen AG, the world’s second-largest EV manufacturer, at a June 1 conference at the CAR Symposium conference in Bochum, Germany.
Tesla has managed to secure its position despite factory shutdowns, a lack of computer chips, and other supply chain constraints since the pandemic.
The VW CEO said that other auto companies in the years ahead, need to find solutions and pick up their pace in the industry’s shift into the growing EV market.
VW’s share of the EV market stands at 11.28 percent, closely behind Tesla’s market share of 13.84 percent.
Tesla and its CEO Elon Musk, presently have the industry lead, said Diess, but “there’s a lot coming from our side too ... a lot of momentum. It will certainly be tight in coming years.”
He said Tesla is “moving very fast, very focused,” and is “twice as fast as the rest of the industry.”
Diess said that his American rival needs to continue to build expensively complex factories and hire skilled workers in order to stay ahead of the electric vehicle race while adding that Volkswagen has major plans to move ahead into the lead.
Tesla is posing a threat to VW and other German electric vehicle makers at home, with two new plants, including one near Berlin, which has the advantage of brand new state-of-the-art facilities and only a small number of models, which makes it easier to adapt production to consumer demand on a particular vehicle line.
Diess said that more momentum will be coming to Volkswagen, which will be accelerating its production lines in the coming years. He said he expects the German automaker to beat Tesla at its own game in EV sales by 2025, after its supply chain issues are alleviated.
The German CEO has reason to be confident, as VW’s electric vehicles have already sold out in the first quarter of 2022 in the United States and Europe, with the delivery of more than 99,000 electric models, as well as from its Porsche, Audi, Škoda, other subsidiary brands.
Since he joined VW as CEO, Diess has been making deep reforms within the company in order to make the German automaker more competitive on the world stage.
In a bid to appease the powerful auto unions, VW decided in April to proceed with a brand new 2 billion euro ($2.1 billion) plant next to its headquarters in Wolfsburg, Germany, which can produce electric vehicles at a far faster pace than it currently does.
VW had faced previous delays in improving competition and efficiency after earlier efforts were held up by an archaic corporate structure and resistance from the unions.
Like many electric car manufacturers, VW is conducting a complete overhaul of its supply chains, as soaring prices for key raw materials to make batteries are severely cutting into the returns for vehicles.
The automaker is also building six new battery factories in the EU, to reduce dependence on unreliable overseas suppliers and is looking for new critical sources of raw materials directly from mines in regions like Africa.
“Why do we have to do all this? Because there aren’t existing supplier structures,” said Diess.
Meanwhile, VW is moving forward in offering up public shares to major investors for its premium Porsche sports car brand to fund the expansion of electric vehicle production.
Deiss believes that the chip shortage may begin to ease in the second half of 2022, after observing signs that supply chains are “getting in order again.”
“I would say that we would see an alleviation of this situation towards mid-year and second half we should be in better shape—if the situation is not getting any worse, which I don’t think so,” he concluded.
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