Tesla and Volkswagen: From Rivals to an Unlikely Alliance

Foreign media reports reveal that Tesla and Volkswagen have recently solidified an unlikely alliance in the automotive electrification sector. Analysts note that while the two companies have historically held differing views on electrification, their decision to join forces clearly signals a pivotal shift in the automotive industry's trajectory. This week, Tesla CEO Elon Musk surprisingly paid a visit to Herbert Diess, Chairman of Volkswagen, in western Germany.
A few years ago, Volkswagen and Tesla were positioned at opposite ends of the automotive industry. Volkswagen was widely regarded as a marvel of German car manufacturing, while Tesla was struggling to raise enough capital to sustain its production—and push forward with its ambitious vision. In the electric vehicle sector, the two companies could also be described as rivals.
However, 2020 brought these two companies a transformative "Twisted Friday"-style turnaround. Today, traditional automakers are rapidly shifting toward electric vehicles. Meanwhile, Tesla is aggressively accelerating its electrification strategy, firmly maintaining its lead over other companies that have tried to follow in its footsteps. From 2008 to 2015, Volkswagen could hardly be seen as Tesla's ally. In September 2015, the German automaker found itself mired in a crisis of plummeting profits and tarnished reputation after being exposed for installing cheating devices in its car emission systems—a scandal known as the "Dieselgate" affair. Many consumers vowed never to consider buying another Volkswagen vehicle again. Yet, despite this rocky history, Volkswagen later managed to earn recognition from some high-profile figures in the EV space, including Elon Musk himself. Still, the relationship between the two companies hasn’t always been smooth sailing.
A Volkswagen employee once criticized Tesla using a pseudonym, an action that immediately drew criticism from Musk. Numerous sources later revealed that Diess had already addressed the issue, yet the dramatic incident between the two companies didn’t end there. Musk has also previously shared his thoughts on Volkswagen’s emissions scandal. On September 4, 2019, Musk tweeted: "In heavy traffic, the toxic fumes emitted by the car in front of you can directly enter your air-conditioning intake. Thankfully, gasoline and diesel car manufacturers haven’t been cheating on emissions—otherwise, we’d be in real trouble." This seemingly lighthearted comment was, in fact, an indirect jab at Volkswagen’s unethical practices. However, Musk has come to recognize Diess as an ally and is now actively supporting Volkswagen’s transition toward electrification. In fact, Tesla CEO Musk even remarked, "Diess has done more for electric vehicles than any other major automaker. Either way, he has my full support."
Last November, Musk and Diess appeared together on stage at Berlin's Golden Steering Wheel Awards, exchanging compliments and engaging in a conversation filled with mutual encouragement. The two have already made it clear that their respective companies have become friends—Musk even announced later that same evening that Tesla would build a new factory in Berlin.

In early September 2020, Musk flew to Germany to advance business matters. During this quick trip to the country, his final stop was a visit to his friend Diess, where Musk took a test drive in Volkswagen’s ID.3 and also got a glimpse of the ID.4 model, which competes directly with Tesla’s Model Y. As Tesla rapidly pushes ahead with the construction of its Berlin Gigafactory, the company plans to begin car production there as early as July 2021. While Diess seemed reluctant to share details about his own electric vehicle initiatives with a rival, he was more than happy to give Musk a comprehensive tour of the facility. But why exactly?
Although corporate collaborations are relatively rare in the automotive industry, it seems that a partnership between Tesla and Volkswagen is not an entirely far-fetched idea at the moment. Executives from both companies are highly open to showcasing each other’s products, and the two firms could even collaborate to enhance their respective businesses. Volkswagen has been manufacturing cars in Germany since 1937—85 years of market experience that could help Tesla gain a stronger foothold in the German market. In return, Volkswagen might also benefit by gaining valuable insights into Tesla’s innovative strategies and operations.
Currently, Volkswagen is facing an open issue with the MEB platform used in its ID series vehicles. Experts have pointed out that Volkswagen's MEB platform planning lacks thoroughness. On the other hand, Tesla has already established itself as a leader in software and electric vehicle technology. Given Elon Musk's strong willingness to support the advancement of electric vehicles, Tesla could extend a helping hand to Volkswagen in addressing this challenge.
This July, Musk told the media: "Tesla is open to software licensing, powertrains, and battery supply. We're simply working hard to accelerate the transition to sustainable energy—not to crush our competitors!"
It remains to be seen whether the two companies will ultimately decide to help each other. However, this collaboration will benefit both Tesla and Volkswagen—and in the long run, it will also accelerate the advancement of sustainable energy.

Translated from Sina Auto

Email:
info@adtfm.com

Phone:
021-20532053

Address:
2nd Floor, No. 150 Jindian Road, Pudong New Area, Shanghai