Volkswagen's chairman says Tesla Model Y is a 'reference' as it builds competing electric cars

• Tesla's Model Y is a reference point for Volkswagen as it hopes to compete with its own electric vehicles, according to a VW exec.

• The comments from VW's chariman come after a high-profile meeting between himself and Elon Musk in Germany.

• The duo also test-drove each other's vehicles.

• Visit Business Insider's homepage for more stories.

Volkswagen knows what it's up against when it comes to building electric cars.

After meeting with Tesla CEO Elon Musk and test-driving each other's competing cars, Volkswagen chairman Herbert Diess said the Model Y is a reference point as VW scales up sales of its electric models.

"Of course I also tested a Tesla Model Y — with my colleague Frank Welsch," Diess said, along with a photo. "This car is for us in many aspects (not in all!) a reference: user experience, updatability, driving features, performance of the top of the range models, charging network, range."

"Big advantage: Model Y was/is thought through as an electric car — as is the ID.3," he continued. "Many of our competitors still using their ICE [internal combustion engine] platforms. The result: They aren't getting the best EVs."

His comments come as Volkswagen races to catch up with Tesla after its own development of the ID.3 fell behind schedule. According to Reuters, the car is receiving negative reviews even as it comes close to a public debut. Germany's Auto Motor und Sport criticised the car's overall finish, including uneven panel gaps, and said the infotainment system leaves much to be desired.

By 2025, VW hopes to sell 1.5 million electric models on its platform that can be used for any of its brands, including Porsche, Audi, Bentley and more. That number would dwarf Tesla's 367,500 it sold in 2019.

But VW has struggled to get the program off the ground, something its own head of labor has lamented in the past. Tesla, meanwhile, is rapidly building a factory near Berlin to produce its own cars to sell in Germany and in Europe.

"Great trip to Germany," Musk said on September 3. "Support from government & people is super appreciated!"

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