Volkswagen has admitted that development of the next-generation Phaeton was cancelled because of the Tesla Model S.



Talking at the Geneva Motor Show, Volkswagen brand boss Herbert Diess said that development of the new-age Phaeton was quite progressed when the marque decided to pull the plug for fear that it wasn’t going to match up to the Model S.

“We were quite far advanced with the next Phaeton but it became clear it wasn’t enough of a leap forwards. A modern large saloon has to be competitive and have an advantage over the Tesla, which is the benchmark and in many regions dominates the segment.

“Now, if we go back there, we have to take Tesla seriously, and of course that is what we are doing with our electric strategy,” added Diess, as reported by Autocar.

The automaker has apparently started to work on the new Phaeton and plans to launch it by 2020. With Tesla now in its sights, it will be dramatically different than the Phaeton we are familiar with and could even adopt a new name.

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