The legendary thinker Lao Tzu as soon as stated ”there isn’t a better hazard than underestimating your opponent” and Herbert Diess is clearly taking that to heart.
Volkswagen’s CEO is going full tilt boogie in his efforts to catch up with Tesla (TSLA) – Get Tesla Inc Report in the hard-charging race to dominate the electric vehicle market.
‘Moving Very Fast’
But Diess does not diss his opponent. Quite the opposite, actually, as he showed on June 1 while speaking at the CAR Symposium conference in Bochum, Germany.
The govt stated that Elon Musk’s outfit is “moving very fast, very focused” and added that Tesla’s co-founder is “twice as fast as the rest of the industry.”
This is not the primary time that Diess has acknowledged Tesla’s velocity and agility. The govt stated final month that “we didn’t expect our main US competitor to be so fast and well-prepared.”
“It will be tight but we won’t give up on it,” Diess stated on the Financial Times Future of the Car 2022 convention. “I might nonetheless see an opportunity that by 2025 we’re first. At least second.”
And the corporate not too long ago sent out a love tweet to its Texas-based rival by declaring “@Tesla Model-Y do not we take a second to acknowledge how a lot you have performed for the way forward for electrical autos? #saysomethingniceday #drivebigger #driveelectric.”
But Diess is being paid to push Volkswagen into the electrified future. After all, the man wasn’t named “Best CEO within the World” in 2018 by CEOWORLD Magazine just for making nice with his competitors.
As he said at Bochum, “there’s so much coming from our facet too… numerous momentum. It will definitely be tight in coming years.”
During last month’s shareholder meeting. Diess said he expects Volkswagen’s electric vehicle business to be as profitable as its fossil fuel-burning cars sooner than planned.
The CEO said the company had previously expected to match its profit margins from combustion engine vehicles with electric vehicle sales in two to three years, but the company is able to make that happen sooner.
‘Strengthened Our Resilience’
While Diess did not say when this would happen, he did maintain that “by good disaster administration, we’re financially sturdy and have strengthened our resilience.”
That resilience is going to come in handy against Tesla. Earlier this year the carmaker delivered the first-ever Model Y sedan made in its Berlin factory.
Meanwhile, Volkswagen said last month that it had started production of the ID.4 all-electric crossover at a new facility in Emden, Germany.
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And the company is planning to introduce an electrified version of the Scout with production slated to begin 2026.
Diess said at the time that “electrification offers a historic alternative to now enter the extremely engaging pick-up and R-SUV section as a gaggle, underscoring our ambition to turn into a related participant within the U.S. market.”
HSBC analyst Edoardo Spina was feeling good about Volkswagen as he recently upgraded the company’s shares to buy from hold.
“VW’s ID ramp-up points and basic weak point in China from final yr began bettering and we anticipate additional energy because the market recovers from the continued lockdowns throughout 2H22e,” Spina told investors in a research note. “In Europe, VW is guiding for sturdy momentum within the EV market, and the headwinds from the disruptions in Eastern Europe and the semiconductor shortages are impacting earnings.”
Volkswagen is planning an preliminary public supply for the sports activities automobile model Porsche and Spina stated that is to be a “essential optimistic catalyst” in the fourth quarter.
There have been stumbling blocks in Diess’ journey toward EV dominance. In 2019, he had to apologize for using a phrase that echoed the Nazi-era slogan “work units you free.”
That same year, Diess and Volkswagen’s chairman, Hans Dieter Pötsch, were charged by German prosecutors with stock market manipulation tied to the carmaker’s diesel emissions scandal.
‘Dieselgate’ and Beyond
The charges stemmed from the company’s admission in 2015 that it had rigged millions of diesel cars worldwide to cheat on emissions tests.
Volkswagen said at the time that the allegations were unfounded. The charges were dropped in 2020 in exchange for a fine of 9 million euros, or about $10 million.
Last month, the company agreed to pay 193 million pounds, or $242 million, as part of an out-of-court settlement to around 91,000 British drivers connected to the “Dieselgate” scandal.
And Volkswagen has been criticized for operating a factory in the Chinese province of Xinjiang, where the government has been accused of carrying out human rights abuse.
Diess said the company would not end its operations there because “we imagine that our presence has a optimistic impression.”
In addition, German media is reporting that company is facing an investigation by Brazil’s public prosecutors over accusations of human rights violations at a large farm it ran in the Amazon rainforest basin in the 1970s and ’80s under the country’s then military regime.
Volkswagen Brasil, which in 2017 already acknowledged cooperating closely with the dictatorship and providing it with “black lists” of politically suspect employees, said in a statement that it will “contribute to the investigations in a very serious manner,” in line with La Prensa Latina.