Any merger is fraught with difficulties but there can be benefits to both sides if successful.
In this case Tesla would get access to VW manufacturing might and VW would get a quantum leap in battery technology.
A problem I forsee is Tesla isn’t just a car company, battery storage will be worth much more to the company than cars. They also have Tesla solar both ofvwhich would likely get partioned from any car merger.
The biggest problem, however, is Musk himself, according to press reports he can be difficult to deal with and there’s no way VW would let him lead the joint company.