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Tesla and Volkswagen: from fierce competitors to unlikely allies

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Tesla and Volkswagen have established themselves as unlikely allies in the world of turning vehicles toward electrification. However, the two companies did not always see eye to eye, but the tides have certainly changed. Evidence of this comes just a day after Elon Musk took an unexpected stop in Western Germany to see Volkswagen Chairman Herbert Diess.

Years ago, Volkswagen and Tesla were sitting at opposite ends of the spectrum. One company was a well-established marvel of German automotive manufacturing, while the other was struggling to rally enough capital to keep its own production efforts moving forward.

However, 2020 has given the two companies and effective dose of the “Freaky Friday” treatment, where the former automaker is struggling to keep functioning EVs on the road. Meanwhile, the latter is surging forward the charge to electrification and maintains a healthy lead over other companies that are attempting to follow in their steps.

But from 2008 to 2015, Volkswagen was far from ever being considered a Tesla ally. The German automaker was violating the EPA’s Clean Air Act by knowingly placing cheat devices in their car’s emissions systems. The scandal, known as Dieselgate, set a semi-permanent mark in the minds of the environmentally-conscious.

Many swore never to consider repurchasing a Volkswagen vehicle, but the company has won some prominent figures in the EV community. Most notably, Elon Musk. But the relationship wasn’t always healthy.

Musk was critical of a conspiracy that a Volkswagen employee was criticizing Tesla through a fake name. According to numerous sources, Diess had the situation handled, but the drama between the two companies didn’t necessarily end there.

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Dieselgate was still slightly in the head of Musk. The CEO mentioned that Tesla’s HEPA grade filter was needed while sitting in close traffic because toxic tailpipe emissions could affect the air quality of those who occupy vehicles that are around. “Good thing gas/diesel carmakers didn’t cheat on their emissions or we’d be in real trouble,” Musk joked, indirectly taking a jab at Volkswagen’s wrongdoing.

However, Musk has recognized that Diess is an ally and is driving Volkswagen toward electrification. The Tesla CEO even said that Diess is “doing more than any big carmaker to go electric. For what it’s worth, he has my support.”

Musk and Diess then appeared on stage together at the Golden Steering Wheel Awards in Berlin last November, trading compliments and smiling from ear to ear with encouragement. The two had shown their business ventures had resulted in a healthy friendship, and Musk even announced that Tesla would be bringing a new facility to Berlin on the same evening.

(Credit: AUTO BILD/YouTube)

In early September 2020, Musk flew to Germany to conduct business. His final stop on his quick tour of the country was to pay his friend Diess a brief visit, where Musk drove the ID.3 from Volkswagen and took a peek at the Model Y’s competition in the ID.4. With Giga Berlin moving along swiftly and Tesla intending to start manufacturing vehicles in July 2021, it would seem that Diess would want to keep a competitor at bay and not reveal his plans for an electric car. But he was more than willing to show Musk around. Why?

While company collaborations are rare in the automotive sector, a Tesla and Volkswagen one wouldn’t be a far-fetched idea. The two companies have executives that are more than willing to show their products to each other, and the two could also help each other in improving their businesses. Volkswagen has been building cars in Germany since 1937. Eighty-five years of market data could help Tesla make an enormous impact on the German market, and Volkswagen could undoubtedly share some hints if Tesla required them.

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Meanwhile, Volkswagen has had a very public problem with its MEB infrastructure within the ID family of cars. Tesla, on the other hand, has established itself as the most prominent figure in terms of software and EV tech, and it could always lend a helping hand to Volkswagen, especially considering Musk is more than willing to help electrified fleets come to life. “Tesla is open to licensing software and supplying powertrains & batteries,” Musk said to Teslarati In July. “We’re just trying to accelerate sustainable energy, not crush competitors!

Whether the two companies decide to help, each other remains to be seen. But, the partnership will help both Tesla and Volkswagen out, and in the big picture, enable the acceleration to sustainable energy to occur faster.

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Tesla’s two defunct flagship models are getting a big upgrade

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Tesla’s two recently-defunct flagship models, the Model S and Model X, are getting a big upgrade, according to the company’s Head of AI, Ashok Elluswamy.

Older Hardware 3 Model S and Model X vehicles have been the last major holdouts in Tesla’s Full Self-Driving v14 Lite rollout, and that wait now appears to be ending.

Tesla brings closure to flagship ‘sentimental’ models, Musk confirms

At Tesla’s Cybercab launch, AI chief Ashok Elluswamy told Ryan McCaffrey that he thought the S and X build “was supposed to go out last week.” Evidently, Elluswamy expects the suite to be rolled out to those HW3 Model S and Model X very soon:

Those cars are not the current Model S and Model X, which already ship with Hardware 4. They are the pre-refresh flagships built around Tesla’s older Autopilot computer, often called HW3 or AI3.

Tesla stopped putting that computer in new vehicles years ago, which is why owners treat these S and X cars as a closed generation. Model 3 and Model Y vehicles on the same computer began receiving v14 Lite in late June 2026 and saw a wider North American expansion in July. South Korea followed as an early international market. The S and X versions of the same software never joined that wave.

v14 Lite is Tesla’s way of squeezing the current v14 driving stack onto hardware that cannot run the full AI 4 model. The company describes the process as distillation: behaviors learned on the newer computer, including reinforcement learning and offline models, are compressed so the older chip and cameras can use them as a guide.

Early descriptions put the distilled network at roughly 15 percent of the original size. The result is still supervised Level 2 driving. Tesla has been clear that HW3 cannot support unsupervised Full Self-Driving or robotaxi operation because of memory and bandwidth limits.

The feature list is what made the wait so frustrating for S and X owners, as plenty of new features are to be shipped with it.

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Official notes for the first Lite build, firmware 2026.20.5.1, added parking, unparking, and reversing; arrival options for a parking lot, street, driveway, or curbside; speed profiles that stay available at all times; and start-from-park engagement. Tesla also claimed better handling of merges, forks, pedestrians, traffic lights, and cut-ins, plus fewer false slowdowns and smoother lane centering.

A mid-July follow-on build, 2026.20.6.10, added more of the Hardware 4 interface, including a standalone Self-Driving app and the ability to start a trip from Park without a brake-pedal confirmation.

Elluswamy called that version the one “likely going to wide release.”

That wide release already reached most other HW3 cars in the United States and Canada. International timing still depends on regional validation and regulatory approval. For S and X owners, the remaining work appears to be model-specific validation rather than a new software stack.

There is no official Tesla changelog or build number for those two models yet, only Elluswamy’s offhand timeline. Some HW3 drivers who already have Lite report large gains over v12.6; others have described new indecision or phantom braking. The next test will be whether the same software lands cleanly on the older flagships that have waited the longest.

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This tiny Tesla Cybertruck adjustment has big advantages

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Credit: Wes Morrill | X

Yesterday, we reported on Tesla Cybertruck getting some major adjustments from a manufacturing standpoint in an effort to make the all-electric pickup more cost-effective, more reliable, more serviceable, and more easily produced.

Tesla Cybertruck engineer reveals new changes in ‘constantly evolving’ pickup

One of those changes was the addition of a self-reinforcing polypropylene aero shield that sits underneath the truck. Previously, Tesla utilized aluminum for this, but the self-reinforcing polypropylene was more durable while also being cheaper and lighter.

Tesla has revealed another small change it made to the Cybertruck, and it has to do with the side repeater cameras.

Tesla does not wait for a new model year to improve its vehicles. On September 8, Cybertruck lead engineer Wes Morrill posted side-by-side photos of an updated side repeater camera housing now rolling off the line at Gigafactory Texas.

The triangular camera pod mounted on the front fender looks almost identical at first glance. A closer look reveals a revised contour that uses the air already flowing around the truck to keep the lens clearer in rain and road spray.

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The side repeater cameras sit in an exposed position on the Cybertruck’s angular stainless-steel body.

In wet weather, they readily collect water droplets that can degrade the image Autopilot and Full Self-Driving use for lane changes and blind-spot monitoring. Early production trucks sometimes left owners wiping lenses by hand or accepting temporary restrictions on driver-assistance features.

Tesla has added washers to cameras on certain other models and on Cybercab prototypes, but those active systems add cost, complexity, and extra potential leak points.

The new housing solves the problem with passive geometry. Subtle changes in the surround create localized airflow disturbances as the vehicle moves. Those eddies physically push water droplets away from the optical surface. Morrill called the result “pure vision improvement” achieved at “no cost penalty.” Once the production mold is updated, every subsequent part costs the same as the original.

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The advantages compound quickly. Clearer cameras in rain improve the reliability of driver-assistance features precisely when they are needed most. The design consumes no extra energy and introduces no new failure modes.

New Cybertrucks built after the tooling changeover receive the updated part automatically. Some owners of trucks delivered as late as June 2026 have already confirmed they received the revised housing. Retrofit questions have appeared in replies, and the cameras appear electrically compatible, though Tesla has not announced an official service program.

A few millimeters of reshaped housing will not make headlines the way a new battery pack does, but these changes are incremental and increase the Cybertruck’s effectiveness as a vehicle over time.

This improvement illustrates how Tesla continues to refine the Cybertruck after volume production began. Better wet-weather vision, zero added cost, and no extra hardware add up to a meaningful gain in everyday usability and safety.

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Tesla is rolling out a new FSD version with a massive safety addition

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Credit: Tesla

Tesla is rolling out a new version of its Full Self-Driving suite to some owners that comes with the massive addition of a safety feature.

Tesla is rolling out Automatic Collision Evasion with the 2026.27.6 Software Update, which started rolling out to some vehicles last night. We received the update, along with Full Self-Driving v14.3.9, as well as v14.2 Lite, which has identical release notes as the previous version and seems to have some refinements and improvements in behavior and performance.

However, most of the attention has fallen on the Automatic Collision Evasion feature, which we covered in an article last week.

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The function will activate Full Self-Driving to “try to keep your vehicle safe and then continue driving. It can engage in the following situations while you are driving manually:

  • Scenario 1: A frontal collision is imminent and braking alone may not avoid it.
  • Scenario 2: Your vehicle detects that you are not sufficiently attentive to the road (for example, reaching toward the back seat), or that Full Self-Driving (Supervised) may have been unintentionally disengaged.”

Essentially, FSD will take over when the vehicle determines you are not paying sufficient attention or are heading toward a potential collision. The addition of this feature is incredibly useful as distracted driving is a major issue in today’s world.

Along with the new safety feature is Tesla FSD v14.3.9, which has no additional release notes compared to the previous version, but in my first drives, my first impression is that operation is great, and parking is still sort of a pain point.

Additionally, Tesla v14.2. Lite has arrived. A great review of that is available here:

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The addition of an Automatic Collision Evasion feature is similar to that of other collision avoidance systems that are used by companies like Hyundai, Kia, and Genesis. These programs typically utilize radar and camera sensors to apply emergency brakes autonomously, though evasive steering in a manual driving mode is pioneered primarily by Tesla’s newest addition.

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