Tesla is getting bigger and more successful with each year. In 2016, the company delivered 76,230 vehicles and received over 400,000 reservations for its upcoming Model 3. The company’s innovative vehicles pose a threat to other car manufacturers, which is exactly what Volkswagen brand chief, Herbert Diess, admitted by saying that the Tesla Model S basically killed off the company’s plans for the next-generation Phaeton.

At the Geneva Motor Show, Herbert Diess said that Volkswagen was quite far advanced with the next Phaeton, but then quickly figured out that the vehicle wasn’t as good as it should be, as it didn’t have an advantage over the Model S. He also mentioned that company should have taken Tesla a lot more seriously since the very beginning, which is something it’s doing now with its electric strategy.

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This obviously doesn’t mean that Volkswagen won’t introduce the next-generation Phaeton, which was initially expected to make its debut in 2020. It just means that if the vehicle does see the light of day, it will be quite different and presumably a lot better than originally planned. If the German manufacturer speeds things up, the Phaeton might still be announced in 2020, although this hasn’t been confirmed yet.

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