VW poised to overtake Tesla in EV production and tech, labor chief says

Volkswagen Group is in a position to overtake Tesla in both electric vehicle production figures and software development, the automaker’s labor chief, Bernd Osterloh, said in an interview with a German news outlet.

“If Tesla sets up three factories where 300,000 to 500,000 cars can be produced, then we are talking about a number of units between 900,000 and 1.5 million. We want to achieve the same in 2023, probably even earlier,” Osterloh, who is head of the automaker’s works council, told the Welt am Sonntag newspaper on Sunday. 

VW’s modular electric-drive matrix platform, or MEB, gives the automaker a “huge” advantage,” as it can build any vehicle of any brand on it, Osterloh said.

Osterloh also said he expected an engineering task force called Artemis, set up under Audi CEO Markus Duesmann, to help the group catch up with Tesla’s technological edge. The new Car Software Organization, where all of VW’s software operations are bundled, is a step in this direction, Osterloh told the newspaper.

“Their advantage is that they already have their software in the cars and use it to collect data,” he said of Tesla. “But if we get our system into our cars, we will have much more data within a short time.”

VW said in 2018 that it would spend 44 billion euros ($52 billion) through 2023 as part of a push for now more than 50 full-electric models by 2025.

Osterloh also ruled out the possibility of a four-day week at VW plants to secure jobs despite a growing shift to electric cars that are easier to build and require fewer workers.

Germany's largest trade union, IG Metall, last month proposed negotiating for a transition to a four-day week across to help secure jobs, against the backdrop of economic fallout from the coronavirus crisis and structural shifts in the auto sector.

But Osterloh told Welt am Sonntag that VW's existing cost-cutting plan, which includes reducing the workforce by up to 7,000 through the early retirement of administrative staff members at its Wolfsburg headquarters, was enough to help it overcome the coronavirus crisis and other issues.

"At the moment we are not talking about less work," Osterloh said. "With the Golf we had the [production] levels of last year in June and July and introduced extra shifts," he added. "The four-day week is not an issue for us."

Demands by IG Metall, which represents 2.3 million employees in the metal working and electrical sectors, are potentially significant in Germany because they often set benchmarks for wage negotiations in those industries and beyond.

VW in 2016 set out a cost-reduction program called Future Pact, although the company has ruled out compulsory layoffs until 2025. Osterloh was quoted as saying in July that VW had no need for deeper cost cuts to counter the effects of COVID-19, which dealt a severe blow to car sales.