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Volkswagen’s Diess wants 40 battery factories in Europe to handle EV overload
Volkswagen knows the future of the automobile industry is electric, and it is doing its best to transition its massive German stronghold into a series of large-scale electric vehicle production facilities. A company that is less than ten years out of a major scandal involving emissions cheat devices, VW is equipped with a new head since the Dieselgate scandal initially broke twelve years ago. Herbert Diess is likely the best man for the job: he’s charismatic, he’s driven, and he knows a thing or two about the auto industry. But most importantly, the man who runs Volkswagen knows that to keep up with the surge in electric vehicle popularity, his company will need more of everything, especially batteries, which he is preparing to produce in massive numbers if the European Union’s Green Deal is approved.
Ten years ago, Diess asked the head of China’s CATL, a battery supplier, if the company would ever transition away from smartphone batteries and toward EV cells. At the time, the answer was no. However, things often change, and CATL is now supplying some batteries for Tesla at Giga Shanghai. CATL’s ability to supply large volumes of batteries, paired with its tendency to innovate, makes it one of the industry’s powerhouses.
And while Diess, who has buddied up with Tesla frontman Elon Musk in the recent years, realizes that batteries are “typically supplier products,” he knows it doesn’t have to be like that. Tesla, which has already established itself as the global leader in electric vehicle development, is beginning to supply its own cells. This not only gives the company an advantage to control the way the batteries are made and the quality of the product itself, but it also reduces prices by a significant margin, 69% in Tesla’s eyes.
Diess realizes that if electric vehicles continue to surge in popularity, Volkswagen will need more, and it will likely have to take the route that Tesla is taking. If the Green Deal goes through, Volkswagen will need an estimated 40 large battery factories on the continent of Europe alone.
“If the EU’s Green Deal goes as it is, the battery factories announced so far in Europe will only cover around five to ten percent of demand. If the Green Deal comes, we will need 40 large battery factories in Europe,” Diess explained.
The Green Deal would maintain that the EU would have around 13 million EVs on the road by 2025. This will bring one million public charging stations to various European markets, solidifying the continent as the most friendly place to drive an electric vehicle globally. That all sounds great and wonderful, but Diess is right: companies are going to need cells.
(Credit: Herbert Diess/LinkedIn)
Volkswagen is in the process of building a battery factory in Salzgitter, Germany, together with Sweden’s Northvolt, Diess said. “This is an innovative, young, and still relatively small company,” and Volkswagen is still in the process of trying to solve the logistics of the whole operation. “That would be a manageable task for the large German suppliers,” Diess added in an interview with WirtschaftsWoche.
Diess’ approach for Volkswagen’s electric future is undoubtedly one that a company with the experience and dedication to automotive manufacturing can figure out. However, transitioning away from what legacy automakers have used for 100 years is proving to be a difficult task, and VW is no exception to the issues that come with building EVs. Although its ID.3 is due to roll out with fully functional software, it wasn’t always like that. Early buyers didn’t have simple functions like Apple CarPlay when they picked up their new EV from the German automaker.
But past the infotainment system, Volkswagen knows that batteries are really the bread and butter of this industry. Build a good cell, or source one, and you’re on your way, as long as you are committed to focusing purely on EVs for the future.
H/t: @Alex_Avoigt on Twitter
News
Tesla counters Norway’s VAT hike with dedicated consumer bonus
The move follows Tesla Norway’s stunning finish in 2025, where the company saw substantial sales during the final weeks of the year.
Tesla has rolled out a price incentive in Norway, effectively offsetting a notable VAT increase that hit electric vehicle buyers at the start of 2026.
The move follows Tesla Norway’s stunning finish in 2025, where the company saw substantial sales during the final weeks of the year.
A “Tesla bonus”
Once the VAT increase kicked in at the start of 2026, Tesla Norway’s sales cooled almost immediately, as noted in a CarUp report. Tesla’s response was swift, with the electric vehicle maker rolling out what it calls a “Tesla bonus.”
This bonus effectively cuts prices by up to 50,000 kronor across eight model variants. All versions of the Tesla Model Y qualify for the incentive, along with most Tesla Model 3 trims, save for the base entry-level model.
This means that for Tesla Norway’s best-selling vehicles, the bonus effectively restores pricing to pre-VAT levels. This blunts the impact of the new tax and makes Tesla’s vehicle offerings competitive again in Europe’s most EV-saturated market.
Stabilizing demand
In addition to the “Tesla bonus,” the electric car maker is also offering a promotional interest rate for up to three years, with terms varying by model. The incentive applies to orders placed between January 9 and March 31, 2026, with delivery required by the end of the first quarter.
The stakes are high in Norway, where electric vehicles dominate new-car registrations. From the vehicles that were sold in 2025, 96% of new cars sold were fully electric. And from this number, Tesla and its Model Y made their dominance felt. This was highlighted by Geir Inge Stokke, director of OFV, who noted that Tesla was able to achieve its stellar results despite its small vehicle lineup.
“Taking almost 20% market share during a year with record-high new car sales is remarkable in itself. When a brand also achieves such volumes with so few models, it says a lot about both demand and Tesla’s impact on the Norwegian market,” Stokke stated.
Elon Musk
SpaceX gains favor as Pentagon embraces Musk-style defense reform
The remarks highlighted Musk’s improving relationship with the White House, as well as SpaceX’s growing role in U.S. defense.
SpaceX emerged as a clear beneficiary of the Trump administration’s renewed push to accelerate military innovation, as Defense Secretary Pete Hegseth openly praised Elon Musk’s private space enterprise during a visit to the company’s Starbase launch site in Texas.
The remarks highlighted Musk’s improving relationship with the White House, as well as SpaceX’s growing role in U.S. defense.
Hegseth embraces Elon Musk’s pace
Speaking at SpaceX’s Starbase facility in Brownsville, Texas, Hegseth criticized what he described as a “risk-averse culture” among traditional defense contractors and called for faster innovation modeled after Musk’s approach. He confirmed that the Department of Defense plans to integrate Musk’s Grok AI platform into Pentagon systems, which is part of the administration’s efforts to make the U.S. military an “AI-first warfighting force.”
Hegseth stated that the Pentagon intends to deploy AI models across both classified and unclassified networks, signaling a willingness to push past earlier efforts to limit military use of artificial intelligence. His comments aligned closely with President Donald Trump’s recent call for a $500 billion increase in defense spending, Bloomberg News noted. Trump has also warned major contractors that slower production and shareholder-focused practices could put future contracts at risk.
While Hegseth criticized legacy defense firms, SpaceX was held up as an example of how aggressive timelines, vertical integration, and iterative development could reshape defense strategies. “We need to be blunt here; we can no longer afford to wait a decade for our legacy prime contractors to deliver a perfect system. Winning requires a new playbook. Elon wrote it with his algorithm: question every requirement, delete the dumb ones and accelerate like hell,” Hegseth said.
SpaceX’s expanding defense role comes into focus
SpaceX has become one of the U.S. government’s most important aerospace partners. The company holds roughly $4 billion in NASA contracts to develop Starship into a lunar lander, while also serving as a key launch provider for sensitive national security payloads using its Falcon 9 and Falcon Heavy rockets.
During the visit, Musk highlighted that his ambitions extend beyond defense contracts, reiterating long-term goals of interplanetary travel and eventual exploration beyond the solar system. Still, the optics of the event reinforced how closely SpaceX’s capabilities now align with U.S. strategic priorities.
The appearance also marked another step in Musk’s political rehabilitation after a public falling-out with the White House last year. Since leaving his role leading the Department of Government Efficiency, Musk has gradually reengaged with the administration, reconnecting with U.S. President Donald Trump during slain conservative activist Charlie Kirk’s tribute and attending events at the White House. Trump’s also recently suggested that Starlink could help restore internet access in Iran.
Tesla has launched a new Model Y configuration in the “Premium” trim, and it comes with three highly requested features that have launched in markets outside of the U.S. and in other trims.
Tesla announced on Monday night that it has officially launched the Model Y Premium in a seven-seat configuration, which also comes standard with a 16″ touchscreen and black headliner, both of which are featured in the Model Y Performance trim.
The seven-seat configuration is highly requested by consumers and helps fill out the more spacious SUV offering that the lineup has missed outside of the Model X, which prices out many consumers. This new upgrade only costs $2,500 extra for all three features, bringing the cash price to $48,990.
This also comes with the larger 16” touchscreen! pic.twitter.com/aiAxWUTKZa
— TESLARATI (@Teslarati) January 13, 2026
The move to add the seven-seat configuration with the black headliner and additional screen size is a welcome addition, as many Tesla fans have asked the company to come out with an SUV with more seating capacity. Although it is not a full-size SUV, the additional seating will certainly attract some buyers with bigger families.
It appears the third row is slightly more spacious than the past iteration of the seven-seat Model Y, which was available in the previous design pre-Juniper:
Credit: Tesla
However, it definitely still appears to be pretty cramped in terms of legroom. It will definitely be a seating arrangement for smaller passengers, mostly reserved for children.
The other two upgrades are the black headliner, which was launched in other markets and in the Model Y Performance. Many owners have wanted this change, and Tesla listened, but is only offering it with the seven-seat configuration. It also has a larger 16″ touchscreen, also present in the Model Y Performance exclusively:
Credit: Tesla
It is a nice touch to add these highly requested features to the all-electric crossover, which was the best-selling vehicle in the world for the third consecutive year.
Tesla counters Norway’s VAT hike with dedicated consumer bonus
SpaceX gains favor as Pentagon embraces Musk-style defense reform
