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Amidst Tesla’s growing lead in the EV sector, VW boss rallies his troops to avoid being the next Nokia
The cellular phone industry was changed forever on June 29, 2007, when the first generation Apple iPhone was released to the public. It was a fresh and new idea that changed how mobile phones would be used and looked at forever. However, it was a wake-up call to Apple’s competitors and past cell phone manufacturers: Adapt or Fall Behind.
In Germany, a man named Herbert Diess, who runs a little car company called Volkswagen, is aware of the parallels between the automotive and cell phone sectors. Change happens. It happens fast, and if you don’t try to adapt to it, you won’t be relevant in a few years. Take Nokia, for example.
“Nokia is probably a good example of how such a change can happen—if you’re not fast enough, you’re not going to survive,” Diess said in an interview with Bloomberg. “I’m always telling our people this example.”
Nokia was arguably the most popular cell phone brand up until 2007. Most children used their Mom’s Nokia phone to play Snake while their parents shopped, giving it the versatility as a handy portable telephone and entertainment machine. However, Apple thought on a more broad scale and saw the cell phone as an opportunity to revolutionize the way people look at them. Instead of a few buttons and a low-resolution, pixelated screen, Apple got rid of most of the buttons and updated the software within a phone to show that it was capable of everything that a computer could do.
(Credit: AUTO BILD/YouTube)
Fast forward a few years, and Tesla is doing essentially the same thing with the automotive market. The company took the automobile and changed everything about it: the powertrain, the infotainment, the design, and the performance. Now, Volkswagen is trying to avoid becoming the Nokia of cars, looking to adapt to the global automotive market’s ever-changing look.
Volkswagen is arguably the automaker that supports the change to EVs the most of the companies with an ICE-based history. Interestingly, it is the same company that fended off a major emissions scandal within the last decade. However, it still has been the car company with the most support for Tesla and the transition to electrification.
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Volkswagen’s transition begins with updating its currently-operating production plants to support the manufacturing process of EV powertrains. But that is not the biggest challenge the German automaker is facing, according to Diess.
“The bigger transition automotive will face is really as the car is becoming more and more of a software device,” he said, “gathering huge amounts of data, and then building up from the data artificial intelligence, knowledge about the driver, road conditions, safety, and then improving the way this device behaves.”
In regards to Tesla, Diess says that its lead is big, but that the company is helping “pull the industry” along with the guidance of CEO Elon Musk. “He’s a reference for us. If we look into our future and what the car has to become, it has to become electric, and it has to become an internet device.”
In the race to become the premier EV company, Volkswagen has a long way to go. Overtaking Tesla is in the company’s future plans, but Diess realizes that his company is ready for the challenges that lie ahead.
“I think we are the best-prepared company for the EV age. Europe will be one of the main hubs of electrification, and we are well prepared, so I’m happy. The big thing is managing through that transition. In 2024 and 2025, when cars really become Internet devices and start self-driving, I hope that we took the right decisions.”
Elon Musk has publicly questioned Moody’s credit assessments following the rating agency’s decision to assign SpaceX a Baa1 investment-grade rating, two notches above Tesla’s Baa3. The comments came amid discussions comparing the two companies’ financial profiles.
SpaceX earned its first-time Baa1 rating with a stable outlook from Moody’s. The agency highlighted the company’s leadership in orbital launches, the growing recurring revenue from its Starlink satellite network, strong vertical integration, U.S. government contracts, and emerging opportunities in AI infrastructure.
These factors were cited as supporting robust cash flows, margin expansion, and financial flexibility.
Musk responded directly: “Tesla’s credit rating is ridiculously low tbh,” and added, “Yeah, makes no sense. Tesla has over $40B in cash, no debt, and is consistently profitable!” His remarks underscored Tesla’s balance sheet strength and profitability at a time when many traditional automakers continue to report losses in the shift to electric vehicles.
Yeah, makes no sense.
Tesla has over $40B in cash, no debt and is consistently profitable!
— Elon Musk (@elonmusk) June 19, 2026
Tesla maintains a leading position in the global EV market, with diversification into energy and storage, battery technology, and robotics through projects like Optimus. Recent financial updates show the company generated positive free cash flow of $1.4 billion in Q1 2026, supported by operating cash flow of $3.9 billion. Cash and short-term investments stood at approximately $44.7 billion.
Moody’s has affirmed Tesla’s Baa3 issuer rating with a stable outlook in periodic reviews, acknowledging the company’s EV leadership, technology strengths, including AI for autonomous vehicles, solid profitability, and strong liquidity.
Tesla (TSLA) scores Baa3 Moody’s rating for ‘stable’ outlook
However, the agency has also noted challenges in the automotive segment and expectations for margin pressures.
Musk’s critique highlights a common debate about how traditional rating methodologies apply to high-growth, capital-intensive technology companies. SpaceX benefits from long-term government-backed contracts and diversified, recurring revenue streams, while Tesla’s valuation reflects heavy investment in future technologies such as autonomy and robotics.
Both ratings remain investment-grade, yet the one-notch difference has fueled online discussion about potential inconsistencies in evaluating innovative firms.
The exchange comes as SpaceX explores financing options following its recent valuation milestones, while Tesla continues executing on its multi-year roadmap. Musk’s pointed response serves as a reminder that credit ratings, though influential for borrowing costs, represent one lens through which markets assess corporate strength—and that company leaders often view their financial positions through the lens of long-term innovation and cash generation rather than short-term risk metrics alone.
A new report from Reuters claims that a transport authority in Sweden is pushing back against the approval of Tesla’s Full Self-Driving suite because it will travel over speed limits.
The report says the Swedish Transport Administration (TRV) recommends the European Union votes against FSD’s approval. TRV believes it should not be approved until Tesla disables FSD’s ability to speed.
TRV sent a letter to the European Union’s Technical Committee on Motor Vehicles (TCMV), which is set to meet on June 30 to discuss the potential approval of the Tesla FSD suite in the country. Tesla, which has received various approvals in Europe over the past two months, has not provided a comment.
Teslas operating on FSD do travel over the speed limit, depending on the Speed Profile that is chosen. Drivers have the ability to disengage FSD at any point; Tesla specifically states that those supervising the suite are responsible for its actions.
Let’s cut to the chase: humans operating any vehicle speed almost daily in the United States. Realistically, speed limits in the U.S. are more frequently treated as speed minimums. However, other countries are different, and driving behaviors are less aggressive.
TRV believes that “allowing automated systems to systematically exceed legal speed limits…risks undermining both the legal framework and the expected safety benefits of vehicle automation,” the report stated. It’s surprising that Tesla has not received this claim from other countries previously.
This could be a good argument to bring Max Speed back, the setting that previously allowed the driver to choose the absolute fastest the car would travel.
This would still put the responsibility of supervision in the hands of the driver. It would allow the driver to choose whether the car would travel over the speed limit or not, acknowledging that they set the speed, and if they get pulled over, there would be no ability to argue it.
However, it does not seem as if this is something Tesla will do, especially considering many U.S. drivers have requested the feature in an effort to eliminate speeding or at least tone it down. The company has not shown any interest in bringing it back.
Tesla has approvals for FSD in Europe in Estonia, Lithuania, Denmark, the Netherlands, and Belgium.
Tesla is going to let you guide Full Self-Driving with Grok in 3 months, CEO Elon Musk confirmed on X.
The response from Musk, which revealed Tesla plans to allow drivers to effectively control the car and its navigation more explicitly using Grok, puts the feature for about September.
A Tesla owner said that Full Self-Driving is great, but owners should be able to “converse with Grok like we can with an Uber driver.” She then used examples like, “Grok, turn right here,” and “Drop us off right here, we’ll walk due to traffic,” and finally,” Drop at entrance first, then park far away.”
Coincidentally, the final piece of dialogue would also mean features like Banish are potentially on the way soon.
This functionality will be there in about 3 months or so
— Elon Musk (@elonmusk) June 18, 2026
Banish is also referred to as “Reverse Summon,” and would enable the car to self-park while dropping occupants off at their destination.
This would be a great way to improve the overall experience while supervising FSD. Navigation is already a major painpoint that many owners complain about. Manual overrides when a maneuver is requested or canceled (like using the turn signal stalk to override a navigation route), do not always work.
The feature could be especially useful in street parking scenarios in a city, where spots are sometimes tough to come by. Many of us who grab dinner in a more populated area will park a street or two over from wherever we’re going, because sometimes you know that’s the best you will get. If a driver using FSD could say, “Hey Grok, turn right here on Queen St. and park in that open spot on the right,” it could save a lot of confusion FSD might have on its own.
Musk teased that a similar feature was “coming” back in February:
Tesla Full Self-Driving set to get an awesome new feature, Elon Musk says
It is certainly surprising that Tesla is doing it at this point. The company’s more recent moves have been more evident of taking control and inputs away from humans and putting them in the AI’s hands more frequently. The biggest example of this was taking away Max Speed in AI4 cars, giving us Speed Profiles, and not having any input on the fastest speed the car will travel.
Of course, giving navigation preferences to Grok is availble already in Teslas, but not at the drop of a hat. Instead, you can suggest a certain route at the beginning of your drive.
Here’s an example of that from December:
🚨🏈 I am taking my parents and Fiancee to the @Ravens game next weekend and asked @Grok to help me route my @Tesla through a specific neighborhood to reach the correct Lot we will park in.
This is a great example of the new @grok nav integration with the Tesla Holiday Update: pic.twitter.com/rPp4I7q8Yv
— TESLARATI (@Teslarati) December 13, 2025
Finally, the original post that Musk responded to mentioned a parking preference after dropping off the occupants, which describes the Banish feature that Tesla has teased for years.
We’re not sure if Musk was responding more to the ability to guide the car with Grok, or whether he also was including Banish in the three-month prediction timeframe.
Elon Musk challenges Tesla credit rating from Moody’s after SpaceX gets a higher one
Tesla faces Full Self-Driving pushback in EU over ‘speeding’
