The CEO of Volkswagen Group has praised Elon Musk’s Tesla and welcomed the actual fact there will probably be competitors between the 2 companies going ahead.  

Earlier this month, Musk addressed VW executives by way of video hyperlink after being invited to take action by Herbert Diess, who heads up the German automaker. Musk’s look was confirmed by Diess on Twitter and in a put up on LinkedIn.

“I very a lot respect it that he confirmed up — I believe we had a pleasant dialogue,” Diess, who was talking to CNBC’s Julianna Tatelbaum on Thursday, stated.

“And we’ve got to just accept that Tesla units the brand new benchmarks [on] … the EV aspect,” Diess added. “Not solely expertise sensible, but in addition in relation to productiveness, velocity … I believe it is all the time good to have competitors.”

The Volkswagen Group, which is pursuing an electrification technique, is headquartered within the German metropolis of Wolfsburg. Elon Musk’s Tesla is constructing its Gigafactory Berlin-Brandenburg in Grünheide, just a few hours’ drive from VW’s base.

“I very a lot respect that he is coming to Germany,” Diess stated. “He’ll problem us, however we’ll attempt to observe as quick as attainable.”

Diess’ feedback have been made after his agency posted earnings for the third quarter. Working revenue earlier than particular objects dropped by 12.1% to 2.8 billion euros ($3.25 billion), with the German automaker citing “provide points.”

In a press release, the corporate stated: “The worldwide semiconductor bottlenecks notably impacted on the enterprise efficiency of the Volkswagen Group within the third quarter.”

The scarcity of semiconductors just isn’t distinctive to Volkswagen. On Thursday, the Society of Motor Producers and Merchants stated U.Okay. automobile manufacturing in September declined by 41.5% year-on-year.

“Output continues to be hampered by the manufacturing stoppages attributable to the continuing world scarcity of semiconductors in addition to the lack of manufacturing capability arising from the closure of one of many UK’s bigger vegetation,” the SMMT stated.

A complete of 67,169 automobiles have been manufactured final month, the trade physique stated. This represented “the worst performing September since 1982.”

Whereas total output was down, the manufacturing of battery electrical, plug-in hybrid and hybrid fashions accounted for 32.3% of automobiles made.

Electrical targets

Again in July, the Volkswagen Group stated half of its gross sales have been anticipated to be battery-electric autos by 2030. By the 12 months 2040, the corporate stated nearly 100% of its new autos in main markets must be zero-emission.

A couple of months earlier, in March, Diess dismissed the notion his agency may be part of forces with Tesla, telling CNBC that the German automotive big was seeking to go its personal manner.

Chatting with “Squawk Field Europe” on the time, he was requested if he would rule out any future take care of Elon Musk’s electrical automobile maker, by which VW may manufacture its automobiles, or if the Tesla and VW manufacturers would ever unite.

“No, we’ve not thought of [that], we’re going our personal manner,” he replied. “We need to get shut after which overtake.”

“We expect that we are able to – we want our personal software program stack, our personal expertise,” he added. “And in addition, I believe Tesla, or Elon, could be very a lot considering … [about] his manner ahead. So no, there aren’t any talks between Elon Musk and myself concerning becoming a member of forces.”

Volkswagen is certainly one of a number of main automotive corporations turning its consideration to electrical mobility. In July one other German agency, Daimler, stated its Mercedes-Benz model would “be able to go all electrical on the finish of the last decade, the place market situations permit.”

—CNBC’s Chloe Taylor contributed to this report