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Volkswagen, a rocky $50B EV bet, and the bid to chase Tesla’s software prowess

The Volkswagen ID.3. (Credit: John Foulkes/Twitter)

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Among the old guard of the automotive industry, very few could hold a candle to Volkswagen, which has initiated a $50 billion bet on electric vehicles. The plan, it seemed, was aimed at ensuring that the veteran automaker could catch up to Tesla, a dedicated EV maker that has made a name for itself by releasing vehicles that receive over-the-air updates on a regular basis. 

Yet as the first result of Volkswagen’s dedicated EV efforts, the ID.3, rolled off the assembly line, it became clear that releasing software-driven electric cars was not as simple as building the next iteration of the Golf. When the ID.3 was released, the vehicle was incomplete. It could drive, turn corners, and basically do anything that regular cars are expected to do. Software-wise, however, it was nowhere near done. Features that were promised were absent, and promised capabilities such as over-the-air updates were unavailable. 

(Credit: Herbert Diess/LinkedIn)

Even the ID.3’s heads-up display, a feature that is not present in rivals like the Model 3, didn’t function. Early users of the vehicle also reported hundreds of software bugs. By June last year, Volkswagen decided to delay the ID.3’s launch and sell the first batch of the cars without full software. The vehicles are expected to receive an update that would provide the ID.3 with its full feature set, but the initiative will require a service visit around February 2021. 

As noted in a report from The Wall Street Journal, Volkswagen’s issues with the ID.3 were the result of the veteran automaker not being proficient in software. For years, industry analysts and leaders alike have suggested and peddled the “Tesla Killer” narrative, suggesting that once the big players of the auto industry get serious about electric vehicles, Elon Musk’s EV startup would be completely overrun. As it turned out, building electric cars was not as simple. Just because a company can produce good gas and diesel-powered cars does not mean that they can produce good EVs. 

Karsten Michels, a senior engineer for Continental AG, one of the firms which Volkswagen tapped to develop the ID.3’s software, noted that the gravity of the task surrounding the development of custom vehicle software was underestimated. “Maybe we underestimated how much work is involved and how little we could actually rely on existing legacy software,” Michels said. 

(Credit: Volkswagen)

Peter Rawlinson, CEO of Lucid Motors, expressed his thoughts on the situation. “(Ever since Tesla launched its first car in 2008) there was this feeling that the really serious players are going to come. Now, the Germans have finally come, and they’re not as good as Tesla,” he remarked. 

Volkswagen, for its part, seems to be taking the lessons it learned during the ID.3 rollout and is applying it for the release of the ID.4, a crossover SUV that could rival the Tesla Model Y. Herbert Diess, the Chairman of the Board of Management of Volkswagen Group and an executive who has struck a friendship of sorts with Tesla CEO Elon Musk, initiated efforts to overhaul the company’s software strategies. If successful, the ID.4, which will be produced in Europe, China, and the United States, would deliver on the promises set forth by the ID.3. 

Ultimately, Volkswagen has learned a notable yet painful lesson during the ramp of the ID.3, the most notable of which is that software is something that legacy automakers still need to work on. Granted, software has been running in gas-powered cars for years, with average vehicles including dozens of parts with chips that are designed to perform specific tasks. EVs, however, require a different type of software, one that is more akin to those used by smartphones today. With electric cars, in-vehicle software becomes the heart of the vehicle, with updates becoming the equivalent of service visits in a gas-powered car. In-vehicle software today is never complete as well, as they must always be open to improvements. 

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Danny Shapiro, senior director of automotive at Nvidia, related his thoughts on the complexity of in-vehicle software. “The key here is taking this distributed system in the car, dozens if not hundreds of applications, and centralizing everything. This is very complex, especially with a car where the safety level is critical. You can’t just flip a switch and be a software company,” he noted. 

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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SpaceX’s Gwynne Shotwell just made a quiet gesture toward Tesla

SpaceX president Gwynne Shotwell quietly followed Tesla on X, and merger watchers noticed right away.

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SpaceX President and COO Gwynne Shotwell has started following Tesla’s official account on X, a small change that landed in the middle of a very loud merger conversation. Whole Mars Catalog joked about it on Sunday.

A follow is not an announcement, and neither company has said anything about a deal. What gives the moment weight is the timing. Barclays analyst Dan Levy has told clients that an agreement could come before Tesla’s annual meeting, which must be held by December 6, with SpaceX as the buyer in an all stock deal, as we reported after the Roadster unveiling. Wedbush’s Dan Ives has stuck with a 2027 timeline.

Shotwell is the executive most worth watching if the two companies do move closer. When Musk was asked at the All In Summit why Tesla and SpaceX remain separate, Shotwell sat next to him and said SpaceX personnel had already moved into xAI to fill leadership and engineering gaps. The businesses were integrating “faster than I thought,” she said, though “not fully integrated yet.” Her responsibilities have also grown since SpaceX absorbed xAI, and she now oversees operations that include Grok and the company’s AI compute buildout.

The financial links are already there. Tesla’s $2 billion xAI investment turned into a stake of less than one percent in SpaceX, the two share the Terafab chip project in Austin, and Musk exercised his 2018 Tesla options a week after SpaceX began trading, a sequence analysts flagged as giving SpaceX public shares to use in a deal. Musk holds about 20 percent of Tesla and controls 85.1 percent of SpaceX’s voting power, according to our earlier breakdown.

The next test is close at hand. SpaceX reports its second earnings as a public company on Tuesday after the close, and Tesla follows on Wednesday. Musk told analysts in July that “we can’t talk about combining companies and that kind of thing on an earnings call,” so a direct answer is unlikely from either stage. Tesla shareholders can still submit and vote on questions through the Say portal until 4 p.m. EDT on Monday, and the merger is a recurring theme in the queue.

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Elon Musk

Tesla Roadster owners to get “Flying Stunt Mode” and looping track access

Musk says Roadster owners can command the unveiling stunts autonomously, with a Texas looping track.

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Elon Musk says owners of the new Tesla Roadster will be able to ask the car to perform the stunts Tesla showed at its unveiling, with the car doing the driving itself. Musk made the comment Saturday in a reply on X to tech blogger Robert Scoble, and he added a promise of a looping track at Tesla’s Texas headquarters.

Scoble had argued that the person in the Roadster is not really driving it. In his description, the driver operates a computer that tells another computer what to do, with steering, braking and acceleration all handled by wire. Musk answered, “True. You will be able to ask the Roadster to perform any of the tricks shown autonomously, as it will be sentient. Also, we will have a wild looping track (crazier even than Hot Wheels) at our Texas HQ where you can test out your Roadster.”

At the October 15 event outside Waco, the car drove up a curved ramp until it was upside down, flew off on cold gas thrusters, flipped and landed. It also hovered over a Cybercab, Cybertruck, Semi, Model Y and Model 3 while moving. As we noted in our breakdown of the three Roadster configurations, Musk said at the event that the car “literally is just going to puff itself up” to perform the maneuvers whenever an owner wants. Saturday’s reply adds that the car would run them on its own.

Tesla has described some of the hardware that would make that possible. The Roadster uses steer by wire with a yoke, and its cold gas thrusters rely on electric actuators for small adjustments in flight. A fan system under the car creates suction, which Tesla says is strong enough to hold it upside down, a setup we covered in our look at the Roadster’s fan system and thrusters.

Musk did not say when an autonomous stunt feature might arrive, how it would work, or what he means by sentient. He also gave no size, location or opening date for the Texas track. Production is planned for Giga Texas in 2027 or 2028, and Tesla says the car is not approved for public road use. The Rocket version, the one built to fly, is invite only.

The comment follows a week of Musk teasing the event, including his claim that the demo would be a banger, which we covered before the stream. Tesla reports third quarter earnings on October 21, and shareholders can submit and vote on questions through the Say portal until 4 p.m. EDT on October 20, according to our earnings Q&A preview. A question about autonomous Roadster stunts and the Texas track would be a quick way to get specifics from management.

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Elon Musk

How to use Grok Bot to block spam calls and texts

Musk told users to ask Grok Bot to scrub their phone numbers from spam lists.

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Elon Musk has a new use case for Grok Bot, and it is the spam call. On Thursday he replied to an X user named Arash with a short instruction: “Ask your @Grok @Bot to remove your phone number from spam call & text lists!” Arash had said he got tired of the calls, had an AI bot find his number on listing sites and file removal requests, and packaged the process as a free skill for others.

The skill is called Spam-Call Scrubber, which is described to find a phone number on people search sites and data brokers, submits the opt outs, completes the confirmation emails those sites send back, and rechecks on a schedule the user picks. Using it requires the Grok Bot app. The pitch is time saved, since most broker opt outs sit behind separate forms on separate sites.



Musk said Grok Bot now gives each bot its own email address, and that it can detect scam emails. On Thursday he also said SpaceX would make users whole if the bot botches a purchase or leaks a card, then told users to shop away from Amazon after the retailer blocked the agent, as Teslarati reported. The terms of service we reviewed at the time put responsibility for what an agent does on the user.

For Tesla owners, Grok Bot is not just a phone app. Tesla brought Grok Bot into its vehicles on September 22, and we argued earlier this week that the Cybercab’s real advantage may be the errands it runs during a ride. Every Cybercab and the rest of the Model Y Robotaxi fleet has it enabled. The more routine tasks like this one become, the more a rider has reason to hand over something personal in the back seat.

The new Spam-Call Scrubber skill can be downloaded for free and works on sites that honor removal requests, while noting that listings can reappear, and illegal robocallers do not check any registry. Whether Spam-Call Scrubber cuts anyone’s call volume is something the first wave of users will find out, and Musk’s endorsement guarantees that wave is coming.

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