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July 24, 2020 11:45 AM, EDT

VW CEO Herbert Diess Lauds Elon Musk Over Tesla’s Earnings

Elon Musk waves during the Satellite 2020 Conference in Washington on March 9.Elon Musk waves during the Satellite 2020 Conference in Washington on March 9. (Andrew Harrer/Bloomberg News)

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Volkswagen AG’s CEO again praised Tesla Inc.’s Elon Musk, this time for showing it’s possible to profit off electric cars even in the midst of a global pandemic.

Tesla and VW group’s Porsche sports-car division will be among the few automakers to navigate the market turmoil caused by COVID-19 without suffering a quarterly loss, CEO Herbert Diess said on LinkedIn.

“Elon Musk delivers results that many have deemed impossible,” Diess wrote in response to a post by auto industry researcher Ferdinand Dudenhoeffer. Diess said Tesla’s results support his view that “in five to ten years the world’s most valuable company will be a mobility company — that can be called Tesla, Apple or Volkswagen.”

Herbert Diess.

Diess

Volkswagen lays claim to the auto industry’s biggest push into electric cars with a five-year investment plan worth more than 30 billion euros ($35 billion). But the rollout of its first purely battery-powered vehicle has gotten off to a bumpy start. The launch of the ID.3 hatchback that went on sale this week was beset by software issues, the coronavirus crisis temporarily shuttering factories, and VW experiencing a management dust-up that nearly cost Diess his job.

Diess, a key driver of VW’s electric-car initiatives, and Musk have exchanged compliments in the past. The former BMW AG executive has repeatedly hailed Tesla’s technological achievements, while Musk has said the VW chief is doing more than any other major automaker to go electric.

 

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Tesla shares have more than quadrupled since mid-March, making the U.S. company the world’s most valuable automaker. Tesla is now worth about $281 billion, dwarfing VW’s $86 billion market capitalization, even as the German manufacturer sells more vehicles worldwide than any other.

VW mapped out plans last year to boost its market value to more than $220 billion but has yet to convince investors it can transform from a company with vast industrial scale into a leading technology powerhouse.

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