Herbert Diess, CEO of VW, invited Tesla CEO Elon Musk to call in to an internal conference with 200 VW executives in an effort to spur further innovation from his company. The two auto execs continue to have a beyond cordial relationship after Musk tried to hire Diess to become Tesla’s CEO.
The VW executive conference happened in Alpbach, Austria and included a lecture by Erin Meyer, a business author and professor of business, and “surprise guest” Musk, who joined via videoconference. Musk’s comments were first reported by Handelsblatt and later confirmed by Diess.
The focus of the conference was to get VW executives on-board with the massive changes VW will need to make to confront the changing auto industry. Diess recognized that VW “did many right things in the past, in the old world Volkswagen is strong, but there is no guarantee for the new world.” He wants VW to make “faster decisions, less bureaucracy, more responsibility”.
As examples of this, Meyer spoke about Netflix’s transformation from DVD to streaming to content production, and Diess spoke with Musk about the reasons Tesla is more nimble than its rivals. Musk reportedly answered: “It’s the management style. I’m primarily an engineer and, besides the car, I’m fascinated by supply chains, logistics and production processes.”
Diess gave the example that Tesla was better able to handle the current global chip shortage than the rest of the auto industry because their software teams rewrote Tesla’s software in just 2-3 weeks, allowing use of different chips.
The two CEOs have met in the past, and seem to get along with each other. Musk stated that he thinks VW can succeed in the transition to electric vehicles, and both consider the other company as their “strongest competitor.” Diess also stated that he plans to visit Tesla’s Gigafactory Berlin in Grunheide soon.
Other automakers have suffered difficulty in the past in getting top executives on-board with the transition to electric vehicles. One prominent example was former BMW CEO Harald Kruger, who became CEO in 2015. He came in with a vision to expand BMW’s electric offerings, but was faced with significant internal resistance from upper BMW executives, according to sources within BMW’s electric division. In 2019, Kruger resigned as CEO, citing his failure to spur BMW’s EV transition.