Volkswagen will catch up with Tesla

THERE IS SOMETHINGEVEVEV of the “Herbie” about Herbert Diess, boss of Volkswagen Group. Like his four-wheeled namesake, the star of several Disney films, he has a mind of his own and a flair for grabbing attention. He is in a high-stakes race in which he is seen as the underdog. And his main rival, Tesla’s Elon Musk, is a “frenemy” with whom occasionally he banters. Investors are salivating: during the past month the German giant’s share price has surged by 60% while Tesla’s has slipped. That is mainly because of a change of heart about which of the two will win the electric-vehicle () contest. Investors have, it seems, caught “The Lo Bug”. It is a spectacular turnaround. For most of last year the ambitions of one of the world’s biggest carmakers looked like a smokescreen to hide the lingering fallout of the five-year-old Dieselgate-emissions scandal, bloated costs and fractious relations between Mr Diess and organised labour. But then Volkswagen’s boss pulled off two coups. First, he won the full backing of the supervisory board, ending the showdown with unions. This may enable him to improve lacklustre profit margins. Second, he sought to out-meme Mr Musk. He used shareable videos, Twitter and a virtual “Power Day” to wow the underdog-loving retail investors that helped drive Tesla’s market value to $800bn last year.