It was a late night in September, 9:44 p.m., to be exact. At a very small airport, in a German city most have never heard of, Volkswagen CEO Herbert Diess patiently waited for the arrival of a special guest: Tesla CEO Elon Musk.
Musk had arrived in Germany a few days earlier to visit the construction site of Tesla's new Gigafactory in Berlin, followed by meetings with German politicians and work on another Tesla-related project. But before heading home, Musk made time to take Volkswagen's new entry into the electric vehicle space, the VW ID.3, out for a spin.
"You know, this is a mainstream car," Diess reminded Musk. "Not a race machine."
Musk chuckled, undeterred.
"Yeah, I just wanted to see what the acceleration is like," responded Musk. "What's the worst that could happen?" Musk asked, slamming his foot on the acceleration pedal.
Although unimpressed with its speed, Musk agreed that the steering was pretty good--"for a non-sporty car." A few questions followed, after which Musk pulled the car back into an airport hangar, taking a quick look at the car's exterior as he walked away. (Diess shared all of this recently via his personal LinkedIn account.)
On the surface, it was a chummy meeting between friendly rivals. A chance for one CEO to show off his company's newest product, and the other to check out the competition.
Or was it?
Let's consider briefly why this recent meeting between Musk and Diess is more than meets the eye--and teaches a brilliant lesson in emotional intelligence, the ability to make emotions work for you, instead of against you.
Musk's master plan
Musk's praise for Volkswagen's new entry-level electric vehicle, while not exactly effusive, shouldn't come as surprising to those who follow him. In fact, you could argue that VW is falling right in line with Musk's own plan and stated goals.
For example, it was way back in 2014 that Musk announced, in a blog post, that Tesla would, "in the spirit of the open-source movement ... not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." While Tesla initially pursued patents out of concern that larger car companies would copy its technology and then use their massive resources to overwhelm Tesla, Musk soon realized that the major automakers had little to no interest in pursuing their own electric vehicle programs--at the time.
"Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world's factories every day," wrote Musk.
Fast-forward just six years, and the unthinkable has happened.
Tesla's share price has skyrocketed, with a market cap higher than Volkswagen's, Toyota's, and GM's combined. With a major shift in society's views on sustainable energy and electric vehicles, legacy automakers are scrambling to push their own EV platforms forward.
At this point, Musk could have focused on saying, "I told you so." Instead, he's been happy to credit Diess and VW for their efforts. "Herbert Diess is doing more than any big carmaker to go electric," Musk tweeted last year. "The good of the world should come first. For what it's worth, he has my support."
It's also interesting to compare Diess's attitude toward Tesla with that of VW's former CEO, Matthias Müller. Müller, who was replaced by Diess in 2018, openly mocked Tesla a few years ago for its low sales. In contrast, Diess has doled out high praise for Tesla for its progress in battery production, openly stating that VW has "a lot of respect for Tesla."
By praising each other, instead of needling, and by focusing on looking for ways to cooperate, instead of ways to compete, both Musk and Diess are opening doors--and that could lead to big things for the future.
For example, just a few months ago, Musk came across an article highlighting German automakers' attempts to bridge the gap between Tesla's technology and their own. In response, Musk tweeted the following:
Tesla is open to licensing software and supplying powertrains & batteries. We're just trying to accelerate sustainable energy, not crush competitors!-- Elon Musk (@elonmusk) July 29, 2020
"Tesla is open to licensing software and supplying powertrains & batteries," wrote Musk. "We're just trying to accelerate sustainable energy, not crush competitors!"
As I've written previously, a deal between Tesla and any of the legacy automakers is a match made in heaven: For the old guard, it's access to what likely equates to a five-year jump in technology. For Tesla, it's a chance to accelerate its mission (and make billions) by taking advantage of the big carmakers' extensive production and logistics networks.
And given the friendly relationship between the two chief executives, it's a safe bet which of the traditional automakers has the greatest chances of striking just such a deal.
Knowing this recent meeting could give cause to rumors, however, Diess thought it necessary to calm down speculation:
"Just to be clear: We just drove the ID.3 and had a chat -- there is no deal/cooperation in the making," the VW executive wrote on LinkedIn.
No deal yet, anyway. Let's see what the future holds.
But regardless of the end result, both Diess and Musk have taught a valuable lesson that anyone in business pays well to heed:
To achieve the greatest success, focus on making friends. Not enemies.