In an interesting and honest comment about their effort to go electric, VW CEO Herbert Diess said that Tesla has an important advantage over legacy automakers when it comes to electric vehicles; they don’t have to worry about protecting their gas-powered car business.
The fact that Tesla only sells all-electric vehicles and only worries about selling electric vehicles give them an important advantage.
Diess made the comment in an interview with Financial Times:
“I think Tesla is doing a good job. They don’t have to care about the legacy. They don’t have to care about the next generation of gasoline in motors and so they can really focus on the future. It’s an advantage.”
The CEO appears to be saying that while they see electric vehicles as the future, but they still have to worry about their legacy business, gas-powered cars, as they invest in electric vehicles.
Nonetheless, Volkswagen is heavily investing in electric vehicles and Diess believes that their mass manufacturing experience is going to help them catch up:
“Some of our competitors have much more speed when it comes to software — software deployment and capabilities where we are still lagging behind. But we are good at scale and so we have a chance.”
VW plans to manufacture up to 3 million electric vehicles by 2025.
I like the honesty here, but I think they are missing the point when they are trying to protect their car business and invest into electric vehicles.
You can’t have your cake and eat it too.
The electric revolution is about replacing gas mileage by electric mileage. Electric vehicles are going to replace gas-powered cars.
VW thinks it can manage the transition in order to affect their gas-powered car business as little as possible, but that reads as “slowing the electric vehicle adoption.”
Considering that it’s clear today you can make a compelling all-electric car that is more than competitive with a gas-powered counterpart, I would argue that EVs are not the future but the present and it makes no sense for automakers to invest into future production of gas-powered vehicles.
Yet, they almost all do it.
I understand that it’s hard to turn your back on your biggest revenue and profit center that has made you billions over the years, but I think the alternative is extinction for those guys.
What do you think? Let us know in the comment section below.