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Tesla is a pioneer that drives Volkswagen’s EV initiatives, says CEO Herbert Diess
Volkswagen CEO Herbert Diess was recently asked about his insights on American electric car maker Tesla during an appearance at the Die Welt podcast. The VW boss was candid, stating that Tesla is a pioneer in the electric vehicle market, and it is one that drives Volkswagen in several areas. Despite this, the CEO noted that VW has a thing or two that can be used to catch up to the Silicon Valley-based company.
Tesla had a rough first quarter, driven largely by difficulties in delivering the Model 3 to Europe and Canada. These difficulties, together with several one-time losses, resulted in Tesla posting a $702 million loss for Q1 2019. During the earnings call for the first quarter, Elon Musk admitted that there was some merit in raising capital for the company, and earlier this month, Tesla did just that. Tesla ultimately raised $2.7 billion from its funding round, with CEO Elon Musk purchasing $25 million worth of shares from the offering.
Amidst these headwinds for Tesla, VW CEO Herbert Diess noted that he hopes the American carmaker will survive. “I hope that Tesla survives because it is, of course, an incentive and an impulse for us,” he said. He later added that while Tesla has established a lead in the electric vehicle market, this headstart was “certainly not unassailable.” Diess explained that as a “small, focused company,” Tesla has certain advantages, particularly when it comes to its battery and its autonomous driving technologies.
Nevertheless, Diess stated that Volkswagen has several strengths of its own that can be utilized to compete against Tesla. These strengths, according to the CEO, will allow Volkswagen to potentially overcome the younger American company and become the leader in electric vehicles. “We are big, we are global, and we also have advantages in scaling, starting up factories, and rolling out the business. This will be our chance in the next few years. We will win,” Diess said.
The CEO later admitted that Volkswagen is aiming to achieve the Paris climate goals by 2050. Diess also added that he personally does not see an alternative to electrification in the next ten years. Speaking about fuel cell vehicles, Diess argued that it would take “two to three times as many windmills and solar modules” to make the technology work.
Volkswagen has shown a notable amount of interest in Tesla in the past. Back when Elon Musk was attempting to take Tesla private, Volkswagen AG was among the companies willing to help raise $30 billion for the privatization deal. Earlier this year, Volkswagen also recognized the Tesla Model 3 at the National Automobile Dealers Association in the US. During the event, Scott Keogh, the chief executive officer of Volkswagen AG’s US unit, argued that Tesla all but proved that electric vehicles are here to stay. “We have not seen in the history of the auto business, a company going from zero to fourth place in luxury in a matter of a few years,” the exec said, referencing Tesla’s rapid rise among automakers over the years.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
Tesla stock closes at all-time high on heels of Robotaxi progress
Tesla needs to come through on this one Robotaxi metric, analyst says
