Tesla is now officially a trillion-dollar company, after it received a huge order from car rental company Hertz for 100,000 vehicles that are to be delivered by the end of 2022. The electric vehicle maker is now in an elite league of trillion-dollar companies with Apple, Amazon, Alphabet (Google’s parent company) and Microsoft - it is the only automaker in this company.

The news of the massive order for 100,000 has dampened some other automakers’ plans to sell EVs in Europe, and it even prompted a reaction from Herbert Diess, the CEO of Volkswagen. Diess and Tesla CEO Elon Musk are on friendly terms and the latter was even invited to speak at a recent Volkswagen executive conference call in front of only VW officials.

According to Reuters, during a recent a call discussing Q3 results (that reportedly ended up being mostly about Tesla) Herbert Diess gave praise to the manufacturer for its success and also announced that the company he’s running will reduce its sales and deliveries outlook as a result of the recent Hertz order - it could have been VW ID.3s, but the ailing rental company opted for Teslas instead, reminding VW that its EVs aren’t quite as appealing as Tesla’s.

Diess said that

The recent achievements of Tesla are sending a clear message. We have to prepare for a new phase of competition.

During the same call, Diess also mentioned Tesla’s new factory that’s almost complete in Grunheide, around 22 miles (35 km) outside Berlin. The facility’s construction on German soil has again made VW adjust its strategy and sales outlook. He added that

Tesla Gruenheide is for us for sure a new reference, setting new benchmarks when it comes to speed, productivity, also lean management and we have to adjust ourselves to that.

Reuters also quotes Hertz interim Chief Executive Officer Mark Fields, who said

Electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest.

We absolutely believe that this is going to be competitive advantage for us.

We want to be a leader in mobility. ... Getting customers experience with electrified vehicles is an absolute priority for us.

Tesla would sell even more vehicles since its problem is not one of lack of demand, but not being able to ramp up production quickly enough to meet the number of orders. 

Herbert Diess’ solution to make VW more competitive in the field of EVs is to

Prepare manufacturing for much reduced labour in some of the lines. We have to prepare for less complexity, for more speed, line speed.

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