Clearly this memo wasn't supposed to get out. Too late.
Tesla's nearly decade-long head start in all-electric vehicles continues to be a thorn in the backside of its mainstream rivals. Although nearly every automaker has placed EV development at the top of their respective priorities list, Tesla still remains the dominant player despite the billions of dollars the competition continues to invest. Volkswagen knows this all too well. German language magazine Automobilwoche has somehow managed to uncover internal communications that show VW CEO Herbert Diess is "worried" about Tesla's lead in both software and its self-driving program.
"What worries me the most is the capabilities in the assistance systems," said Diess in an internal webcast. "500,000 Teslas work as a neural network that continuously collects data and offers the customer a new driving experience every 14 days, with improved properties." Diess then conceded: "No other automobile manufacturer can do that today."
VW's advanced software division must now "implement the Tesla catch-up plan." Not long ago, another report claimed there have been massive software problems with the upcoming VW ID.3. Supposedly, the EV's advanced system was unable to properly communicate with itself and over 10,000 technicians were working around the clock to resolve the issues. The overseas-only ID.3 rides on the same MEB platform that will underpin the US-bound VW ID.4 crossover, meaning both vehicles share many other components as well. Another concern Diess expressed was Tesla's market valuation.
In short, VW is currently worth about half of Tesla's $100 billion valuation "despite our valuable brands such as Porsche, Audi, VW, Bentley and the others," Diess told his executive team members.
The VW CEO was apparently watching Elon Musk very closely during the latter's Model 3 "production hell" in 2018 and is now convinced Musk has what it takes to compete in this business. "There is still a long way for us" [to go], Diess concluded.