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VW Aims to Surpass Tesla in EV Output by 2023

Friendly rivals move toward direct competition in the small crossover segment.
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Volkswagen expects to surpass Tesla in terms of electric vehicle production within three years.

That would mean VW’s annual EV output would reach 900,000-1.5 million vehicles, Bernd Osterloh, who heads VW Group’s works council, tells Sunday’s edition of Welt.

VW’s upcoming ID.4 electric crossover (Image: VW Group)

Playing Catch-Up

Osterloh, who also sits on VW’s board, concedes that VW currently lags Tesla in output and software knowhow. But he says the German carmaker aims to soon overcome both deficits.

He brags that VW’s MEB electric-car chassis can carry virtually any body style produced by any of the carmaker’s brands, a huge advantage in scaling up EV production.

In terms of computing power, Osterloh points to Project Artemis, a 200-member engineering team being set up by new Audi CEO Markus Duesmann to develop a digital platform for future models. He tells Reuters that Artemis will work in tandem with the $7.7 billion Car.Software team launched by VW in January. Both units are collaborating to define VW Group’s digitalized future.

Speed is “extremely important,” Duesmann says. He explains that today’s vehicle development programs today center on electrical and electronics, not on such traditional measures as vehicle size, power ratings or market segment.

Tesla Model Y crossover  (Image: Tesla)

The Tesla Connection

Last week VW Group CEO Herbert Diess invited Tesla CEO Elon Musk to test-drive the German company’s new Golf-sized ID.3 electric car and look over its upcoming ID.4 crossover vehicle. The latter model is expected to be the first EV Volkswagen offers in the U.S. market.

Diess, who has been critical of VW’s sluggish pace of electrification, has repeatedly praised Tesla’s prowess both publicly and to VW employees

Musk was in Germany last week to inspect construction of the new car plant Tesla aims to open next year in Gruenheide outside Berlin. The complex—Tesla’s first in Europe—eventually will have annual capacity to make as many as 500,000 cars.

The facility is being tooled up to build the company’s two mass-market EVs: the Model 3 compact sedan and its new Model Y crossover variant. The latter model will compete directly with VW’s ID.4 crossover.

During the site visit, Musk suggested that Tesla is already updating the Model Y’s “core structural design” to support a dramatic overhaul in the company’s approach to vehicle production.

Bottom Line

Musk also used the occasion to say the German assembly plant might also make battery cells after all, reversing planning documents filed in June that indicated cell production was being suspended for now.

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