Power brokers: Tesla, Volkswagen bosses trade EVs and compliments – but still rivals

Elon Musk and Herbert Diess are two of the most influential people in electric cars and last week the pair came together for an unexpected meeting – one that has caused quite the ruckus online.

While in Germany, the controversial Tesla boss caught up with the more measured CEO of Volkswagen for a drive of the recently released ID.3, a Golf-sized EV that is a crucial pillar in the brand’s transition to electrification. The drive happened on a wet runway at night.

Musk’s Tesla brand makes more EVs than any other car maker (it was formerly Chinese brand BYD, but in 2019 the Model 3 pushed Tesla ahead) and Diess’s Volkswagen hopes to soon snatch that crown.

Volkswagen has nominated 2023 as the year it will overtake Tesla.

Despite the barbs often launched at rival car makers, each was surprisingly complimentary about the others’ wares.

It continues a long-running trend of Diess praising Tesla and its influence on the car industry.

Considering Tesla is now worth more than the much larger and more profitable Volkswagen – at least according to the world’s stock markets – that feat is even more remarkable.

Volkswagen ID.3 v Tesla Model Y

Sure, Musk made some pointed comments about the ID.3’s performance, or lack thereof, hinting that acceleration of the sub-$50,000 hatchback was modest.

“I think for a non-sporty car it’s pretty good,” Musk said after commenting on the steering.

Diess pointed out “it’s not a sports car” nor “a race machine”, later adding that “we are on the runway – but no need for take-off”.

Which to some extent averts a business brawl: Tesla can go on appealing to the EV enthusiasts and those prepared to splash big bucks on a premium electric car, while Volkswagen can swoop in and attack the much broader market that is becoming increasingly EV-aware.

Speculation has centred on why the two caught up, prompting Diess to clarify that no mergers or investment deals are in the air.

“Just to be clear: We just drove the ID.3 and had a chat – there is no deal/cooperation in the making,” Diess wrote on LinkedIn.

The meeting also gave another chance to tease the ID.4, which has also been shown as a concept, as a mildly disguised production model and undergoing testing. As Musk gets out of the ID.3 the white ID.4 off to the side is clear in the video frame, albeit with a disguise on its nose that gives it a more bulbous look than what we’re expecting on the production car, which will be revealed in full late in September.

While the Musk/Diess meeting seemed impromptu, the traditional German way of doing business suggests Volkswagen would have been measured and calculated in the way it utilised the inevitable publicity and the opportunities in its quest to go electric.

While the video and online commentary has centred on Musk driving the Volkswagen that is a lot smaller, less powerful and more affordable than anything in the Tesla stables, it emerged later that Diess drove the upcoming Tesla Model Y.

Diess described the new Tesla SUV as “a reference” for its “user experience, updatability, driving features and performance of the top of the range models, charging network, range”.

Best EVs start from scratch

In an apparent swipe at some German rivals, Diess suggested the clean-sheet designs of all Teslas and the upcoming Volkswagen ID models – including the ID.3 and ID.4 – was the best way to build an EV.

“Model Y was/is thought through as an electric car – as is the ID.3,” said Diess on LinkedIn. “Many of our competitors still using their ICE platforms. The results: They aren’t getting the best EVs.”

Some of those competitors Diess is referring to include the Mercedes-Benz EQC and upcoming BMW iX3, each of which is an SUV based on the architecture of a petrol/diesel car but with the fuel tank and engine replaced with batteries and electric motors.

No love lost between the German manufacturers then!

So, who was the winner out of the Musk/Diess catch-up?

Surely it has to be Volkswagen. Musk has near rock-star-status, with a legion of fans that think he (and/or Tesla) can do no wrong. It’s difficult to imagine that at least a sprinkling of that Tesla magic dust hasn’t rubbed off on Volkswagen after a meeting like this.

All of which Volkswagen could clearly use.

It’s especially important in America, where the Dieselgate emissions cheating scandal is still raw.

Volkswagen is one of world’s biggest car makers (trading the title with Toyota) but like all traditional brands it is currently skinny on EVs. Plenty are in the pipeline and the big sales pitch is in full swing as Volkswagen tries to make the ID sub-brand stick.

Besides, with the following Tesla and Musk enjoy there’s clearly no point in poking the bear… Musk has repeatedly shown he doesn’t mind firing back.