Volkswagen CEO Herbert Diess thinks his firm can become the world’s largest electric vehicle (EV) manufacturer in three years, putting industry leader Tesla in the backseat.
“Tesla is weakening,” the CEO told his employees at a meeting in Wolfsburg Tuesday. “We have to seize this opportunity and catch up quickly – we can take the lead in 2025.” Elon tweetstorm incoming.
Tesla is the EV king, a fact made especially true by the low-interest rate environment that benefitted high-growth companies like Tesla leading up to this year’s bearish market turn. But with that friendly environment in the rearview mirror, Musk’s firm is down 41% this year. And while its $725 billion market cap still dwarfs Volkswagen’s $82 billion (down 22%), the more established Volkswagen made $296 billion in revenue last year, up 16%, to Tesla’s $53 billion, up 71%.
The combination of VW’s establishment advantage and Tesla’s sudden growing pains is the key reason Diess thinks his company can round into first place:
- VW has invested over €52 billion to develop battery-powered EVs, and doubled the number of all-electric vehicles it sold to 369,000 last year — Tesla delivered 936,000. This year, VW plans to sell 700,000 EVs, while Musk has suggested his firm will deliver 1.5 million.
- But while VW’s EV plant in Saxony is running at full capacity and its factories in China are back online, Tesla is still struggling with supply chain backlogs — last week, Musk called the company’s German and US plants “gigantic money furnaces” that are “losing billions of dollars.” Musk also began laying off 10% of Tesla’s workforce earlier this month, which has already earned the company a class action lawsuit.
“Elon must simultaneously ramp up two highly complex factories in Austin and Grünheide and expand production in Shanghai,” Diess said, according to German newspaper Handesblatt. “That will cost him strength.”
Troll Wars: Diess included a meme in his presentation to employees that he tweeted earlier this month, in which actor Jason Momoa, representing VW, is seen sneaking up on Henry Cavill, representing Tesla. One may be German and the other South African, but Diess sure knows how to speak Elon’s language.