Volkswagen holds off on investment plan to counter Tesla - report

VW CEO, Herbert Diess, has convinced board members to hold off its latest investment plan as it gears up to bring the fight to Tesla.

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Volkswagen is holding off on announcing its five-year investment plan as it sets its sights on Tesla.

Originally planned to be announced on November 12, 2021 all of the board members of the German automaker agreed to hold off for almost a month until December 9.

“Over the past few weeks we have intensified the discussions around a shared vision for Wolfsburg 2030,” said Herbert Diess, Volkswagen AG CEO at the company’s latest third-quarter results meeting according to a report from Reuters.

“The increased competitive pressures have underscored the necessity to include this joint vision in our next planning round.”

The reason for this delay is so Volkswagen can counteract electric-vehicle (EV) giant, Tesla, that’s going to start production soon at its state-of-the-art Gruenheide ‘gigafactory’ near Berlin.

“Tesla Gruenheide is for us for sure a new reference, setting new benchmarks when it comes to speed, productivity, also lean management and we have to adjust ourselves to that,” said Diess.

In order to achieve this plan Volkswagen is going to have to alter and automate more of its assembly processes which more than likely spells fewer jobs.

“We have to prepare manufacturing for much reduced labour in some of the lines. We have to prepare for less complexity, for more speed, line speed,” said Diess.

This EV competition just got a lot harder for Volkswagen though, as Tesla recently surpassed a US$1 trillion (A$1.33 trillion) valuation, received a record-breaking EV supply deal, and topped the sales charts in Europe in the month of September.

All of these achievements were announced within the space of a week.

“The recent achievements of Tesla are sending a clear message,” said Diess during the company’s third-quarter results meeting.

“We have to prepare for a new phase of competition.”

Volkswagen’s current market valuation is US$121 billion (A$161 billion).

A few weeks ago Diess welcomed ‘frenemy’ Tesla CEO, Elon Musk to speak virtually at a corporate strategy meeting where they discussed semiconductor shortages and EV transitions.

Earlier this year Diess announced the Volkswagen Group plans to develop six battery production facilities in Europe in an attempt to become the world’s top EV seller by 2025.

General Motors has a similar target in a similar timeframe for the US market only, according to CEO Mary Barra.

MORE: Volkswagen CEO gets Elon Musk to present to his top managers
MORE: Tesla valued at $1 trillion, selling 100,000 electric cars to Hertz

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Jack Quick
Jack Quick
Jack Quick is a Journalist at CarExpert.
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