In a new note to his management team, as he is being challenged by his own workforce, VW CEO Herbert Diess explained why the German automaker needs to be more like Tesla.
Surprisingly, a lot of it has to do with manufacturing – something that Elon Musk said would become Tesla’s main advantage.
As we reported yesterday, Diess is currently facing a vote of no-confidence under review by a board committee after VW’s worker council took offense to him saying that the company could face job losses if it falls behind in the transition to electric vehicles.
Yesterday, we reported on Diess cancelling his US trip in order to address the situation.
He said that he understands that some are frustrated by his constant comparison to Tesla, but he sees a need to emulate them in many ways.
Now, Electrek has obtained a speech that he gave to his management in which he describes, in detail, why he sees Tesla as VW’s main competitor.
Interestingly, Diess seems to have some important information about Tesla’s expected production efficiency at Gigafactory Berlin:
Tesla has long been appreciated for the software, range, and acceleration of its cars but has had problems with quality. The production was ridiculed. But our main competitor is learning fast. The quality is getting better, the customer feedback more positive. And in Brandenburg, Tesla wants to build half a million cars with 7,000 people – direct and indirect. And with an impressive productivity: expected 90 units per hour in one line, 10 hours per car.
Tesla CEO Elon Musk has long said that manufacturing will become the automaker’s main advantage.
Despite Tesla producing more electric vehicles than any other company, the notion has been ridiculed because the volume is still much lower than most other automakers, and quality hasn’t been on par with other premium automakers.
But things have improved over the years, and now Tesla can produce electric cars at an annual rate of 1 million units, with quality continuing to improve.
Diess appears to be aware of the details of Tesla’s planned output at Gigafactory Berlin, and he is particularly impressed with 10 hours of production per car.
In comparison, Diess says that VW is at over 30 hours at Zwickau, and it is currently aiming to bring this down to 20 hours, which would still be twice as much time as Tesla.
Here’s the relevant part of the speech from Herbert Diess:
“Today, Tesla sets the standards here. They build the car around the software. Updates are already part of everyday life for Tesla customers.
We now come every 12 weeks with automatic updates for our ID. family – a big step for Volkswagen!
Congratulations to the team of Thomas Ulbrich and CARIAD for this milestone!
Tesla has long been appreciated for the software, range, and acceleration of its cars but has had problems with quality. The production was ridiculed. But our main competitor is learning fast. The quality is getting better, the customer feedback more positive.
And in Brandenburg, Tesla wants to build half a million cars with 7,000 people – direct and indirect. And with an impressive productivity: expected 90 units per hour in one line, 10 hours per car.
In Zwickau, we are at over 30 hours, we want to achieve 20 hours next year – we
originally started with a project target of 16 hours.
I don’t need to mention here what all this means on the stock market. Tesla has unlimited access to money and resources due to its high valuation. These numbers are what drive me to point out this new competition and not turn a blind eye.
Even if I stop talking about Elon Musk, he’s here to stay, revolutionizing our industry and quickly becoming more competitive.
The Tesla Model 3 was the best-selling car in Europe in September, ahead of the Golf. And this despite the fact that Tesla does not even build in Europe yet. Tesla only imports so far.
Only those who understand and have an eye on the competition can win. Tesla is the benchmark today, and other strong startups have entered our market from China.“
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