Volkswagen AG said Tesla Inc. is moving twice as quickly as the rest of the industry that needs to pick up the pace in the shift to making electric vehicles packed with software.
The U.S. carmaker is “moving very fast, very focused,” VW Chief Executive Officer Herbert Diess said Wednesday at the CAR Symposium conference in Bochum, Germany. In many aspects, Tesla CEO Elon Musk is “twice as fast as the rest of the industry.”
Diess, spearheading deep reforms to make the VW behemoth more agile, often draws comparisons to the global electric car leader to push for efficiencies. In April, VW decided to move ahead with a new 2 billion-euro ($2.1 billion) plant close to its sprawling German headquarters in Wolfsburg to make electric vehicles in about 10 hours, a fraction of the time it currently takes. The decision was a nod to powerful labor unions, who have frequently clashed with Diess over efforts to boost competitiveness.
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VW’s efforts to make changes are often held up by a convoluted governance structure, though the Porsche maker is moving forward with plans for a share sale of the iconic sports-car brand planned for later this year. For VW, making premium cars like Audi as well as volume brands and trucks results in complexity, but the company’s huge scale is also a competitive advantage, Diess said.
In the shift to electric cars, manufacturers are facing a complete overhaul of their supply chains with soaring prices for battery raw materials that risk undermining returns on electric cars. VW, which is working on establishing six battery factories in Europe alone, discussed how to secure critical supplies of raw materials at its most recent board meeting, including possible direct contracts with mines in Africa, Diess said.
“Why do we have to do all this? Because there aren’t existing supplier structures,” said Diess.
(By Christoph Rauwald)