According to Bloomberg Opinion, Volkswagen’s annual spending update for investors quickly turned into a display of how the veteran automaker plans on measuring up to Tesla.
Despite Tesla having only a fraction of the sales VW does, Elon Musk’s company boasts over four times the German automaker’s market cap.
VW appears to be obsessed with Tesla https://t.co/NIaeDvwfpt
— Bloomberg Opinion (@bopinion) November 19, 2020
In what was supposed to be the company’s annual spending update regarding the deployment of its huge €150 billion ($178 billion USD) budget for the next five years, Tesla was name-dropped 31 times during the course of the 2-hour meeting.
Tesla’s all-electric catalog of vehicles, combined with precise execution of its marketing strategies, has taken the auto industry by storm. The company’s upcoming addition to the S&P 500 index only served to further balloon Tesla’s tech company-like valuation.
Volkswagen is already trying its hand in the EV space with well-received offerings like the ID.4, which quickly sold out upon release. However, under the leadership of CEO Herbert Diess, the top brass at Volkswagen has now realized that they lag behind Tesla in technological aspects like vehicle software, driver assistance technology, and ingenuity.
Volkswagen AG has decided to dedicate a staggering half of its entire budget for the next five years to remedying that situation and bringing the legacy automaker right on par with Tesla. CEO Herbert Diess also made a point of VW’s significant dealership advantage against the EV prioneer.
“Everything is set up [for us] to become, on the technological basis, competitive with Tesla,” said Diess, who hopes to be selling 3 million EVs a year by 2025.
However, with four of its five fingers still in the combustion engine pie — as 80% of the cars VW hopes to sell in 2025 will still be powered by petrol/diesel engines, the company’s current pitch of overtaking Tesla as the leading purveyor of EVs is a hard sell.
Nehal has been writing for over half his life now, and has a passion for everything tech — from electric vehicles to the latest smartphones and everything in between.