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Most of those 30k+ are ICE vehicles, though. How much of the ICE vehicle infrastructure and manufacturing capacity and know-how is going to be irrelevant in the

Most of those 30k+ are ICE vehicles, though. How much of the ICE vehicle infrastructure and manufacturing capacity and know-how is going to be irrelevant in the EV world? EV's have fractions of the number of parts, their chassis and structure are categorically different due to battery vs fuel tank and weight and aerodynamics, not to mention how much of VW's know-how is in gasoline ONLY parts? It just seems to me these legacy automakers who haven't done much at all are in for a rude awakening. If battery costs keep declining, anyone who isn't using a battery is going to get smoked on costs, and this is in a carbon-tax free scenario. In many economies with environmentally friendly policy, we should see EV's smoke ICE vehicles on cost MUCH sooner.

neogodless 7y ago
If I understand you correctly, battery-powered motors are much simpler than internal combustion engines, and battery costs are decreasing. Under this argument, VW's ability to build 30k+ car chassis + (complex combustion) engines + interiors, etc. each day is going to be challenged by what aspect of building these simpler electric cars? To date, EV sales are still a bit of chicken-and-egg, and Tesla does have a clear charger network advantage in parts of the world. But EV sales are a very small fraction of overall automotive sales, and until that changes, any doom and gloom on the traditional automakers is still exaggerated.
- toomuchtodo 7y ago
  Battery production. Battery manufacturers are extorting legacy automakers because they don't have their own capacity (LG Chem specifically). The bins you picked from before for ICE production are not the bins you pick from for EV production (for propulsion, at least). Tesla built GF1 in the Reno desert because, at the time (2013) [1], they forecast that at 500k/vehicles a year (which they're almost at), they would be consuming worldwide battery cell manufacturing capacity. And here we are with everyone else playing catch up trying to eek out the batteries they need to deliver EVs to compete against Tesla. [1] https://www.tesla.com/sites/default/files/blog_attachments/gigafactory.pdf https://www.tesla.com/sites/default/files/blog_attachments/g...
  - Traster 7y ago
    I think one of the issues that should be worrying for Tesla, is that it's really Panasonic doing the heavy lifting on the battery side. I'm quite certain when it comes to it, Panasonic are going to be happy selling to Ford/GM/VW/BMW. It's true that Tesla is disrupting the automotive industry, but people don't really appreciate that the automotive industry involves thousands of suppliers of individual components that are then used to build a car by the manufacturers.
    - toomuchtodo 7y ago
      I'll worry about that when Ford/GM/VW/BMW makes an EV worth buying. Until then, the TSLA/Pano partnership seems to be working without issue. The special sauce is the cell chemistry and the battery management system, which Tesla owns.
      - notfromhere 7y ago
        Tesla/Pano have been having a lot of issues - a lot of it being on the Tesla side. Pano is no longer making those batteries just for cars because TSLA can't meet the volume needs
        toomuchtodo 7y ago
        My understanding is that it's because Pano doesn't like Tesla's management style of the relationship (Pano prefers a loose feedback loop and team autonomy, Tesla wants it tight with rapid iteration and constant feedback up the chain), and that Tesla is about to scale up their own cell manufacturing. Feel free to throw citations in if you have solid evidence it's a demand issue, because Tesla sales figures and their last earnings call don't indicate that (their Model 3 backlog actually increased while deliveries also increased).
        reitzensteinm 7y ago
        Parent said nothing about demand.
013a 7y ago
VW is arguably in third place, which is not a bad place to be in. Tesla is obviously King. Toyota is doing fantastic. Nissan is pushing EVs, though the quality of their vehicles leaves something to be desired. VW is not behind most of the market; they're leading it. Tesla's huge early lead will stick around for a very long time, if not indefinitely. They'll become a player as big as VW and Toyota. But, these other manufacturers will catch up and begin to compete just fine. There's plenty of manufacturers that should be concerned (Ford being the biggest one). VW (and by extension, Audi, Porsche, etc) is not one of them.
- tyfon 7y ago
  Volvo also seems to be bringing the goods when it comes to EVs now in the form of Polestar 2 [1]. Personally I have been very positively surprised of Tesla after owning one for a few months and I it would take very much to make me give up all it's niceties but I think the Polestar is a sleeping tiger when it comes to sales. It seems to generate a bit of grass root buzz in the EV communities here in Norway. So some of the incumbents are finally taking the shift to new power trains seriously, but there will be slaughter for those who can't keep up in the long term. [1] https://www.polestar.com/cars/polestar-2 https://www.polestar.com/cars/polestar-2
  - pbreit 7y ago
    Polestar is a low volume experiment and not even available yet. Volvo is way behind.
  - ilikehurdles 7y ago
    This is the first I've heard of it and it looks absolutely amazing. An EV car with a fully-featured interior, reasonably long range, competitive price, and a design that doesn't look like something out of a circus sideshow. I'm really excited about what the EV market will look like next time I'm in the market for a new car.
  - mensetmanusman 7y ago
    It's fascinating that a Chinese state backed enterprise purchased Volvo. I didn’t hear about it until this article, good move China!
mdorazio 7y ago
>How much of the ICE vehicle infrastructure and manufacturing capacity and know-how is going to be irrelevant in the EV world? Not very much. It really doesn't matter what kind of powertrain you have in your vehicles, the biggest part of the manufacturing process is everything else that makes up a vehicle. Frame, suspension, brakes, doors, windows, seats, dash, cabin interior, lighting, electronics, safety systems, sensors, testing, inspection, etc. etc. etc. On top of that, plenty of automotive plants these days get fully-assembled engines and sometimes driveshafts as well from other factories for efficiency and bolt them into vehicles rather than doing build-up from scratch. I've spent quite a bit of time in vehicle factories of several OEMs. I would estimate that less than a quarter of an average factory line is used for powertrain.
- jcims 7y ago
  That’s at the assembly plant though where the powertrain resolves to a few part numbers. In terms of R&D, warranty, service and overall longevity it represents a lot more than that.
  - mdorazio 7y ago
    Agreed. Parts* & Service are two giant profit centers that take a big hit with EVs, which is one of the reasons dealers have been so resistant to selling them for years now. The actual manufacturing doesn't get a whole lot easier, though, which is one of the reasons there have been so many EV startup failures. *Note: Parts here means only powertrain parts. Tesla, for example, is notorious for having massive delays in repair parts availability for things like doors, trim, and windows.
  - ilikehurdles 7y ago
    Companies like Toyota and VW roll out a new chassis once or twice a decade and you see some amount of shared powertrain parts everywhere from economy level to high-end performance and luxury models. They're really good at building common skeletons where every part of a car is pieced together like interchangeable legos. The research cost is high but the investment is inevitably returned with the scale and time available to these entities.
rolfmaoe 7y ago
Nearly all high precision sensors are made by BOSH which are also used in Tesla. Without these sensors, BMC circuits (also done in Germany) EVs will not take off.
carlsborg 7y ago
“As of December 31, 2018, our Research and Development departments employed 51,948 people (+5.3%) Group-wide or 7.8% of the total headcount.” They also spend €13.6 billion on r&d every year.
- jryle70 7y ago
  VW's revenue in 2018 is €235.85 billion so that means they spent 5.7% of revenue on R&D. For comparison, Nokia spent 11% of their net sales in 2007 on R&D, at the time when they appeared invincible, also the year iPhone was announced. Those huge numbers usually don't correlate with success.
ilikehurdles 7y ago
I think you're underestimating VW's understanding of the situation, but I do agree that lagging automakers are in for a world of hurt. I don't foresee Peugot-Chrysler (or whatever it's called by that time) surviving the EV revolution in its current form, and I'm pretty bearish on GM as well. VW group is pushing EVs via all of its major brands (VW, Audi, and Porsche at the very least). These models are also not being treated as one-off afterthoughts (GM style) or cars with a totally different design language from the core brand (BMW i3 style), but match the design language and performance characteristics that I would expect of each brand, all with increasingly impressive battery ranges. They have the global manufacturing/supply chain well figured out, design modular chassis that see use across almost every vehicle in its brands' portfolios over each decade, and this translates to getting nearly-unbeatable pricing from intermediate parts suppliers. Tesla has a lead on both the battery and software, but while other brands are catching up significantly on these fronts, Tesla does one thing better that I don't see any other manufacturer daring to tackle: vehicle purchases. Every stage of buying a car at a dealership is worse than the last, and maintaining these frustrating middle-men and their shopping lots full of unsold vehicles adds unnecessary cost to every vehicle's consumer price.

neogodless 7y ago

If I understand you correctly, battery-powered motors are much simpler than internal combustion engines, and battery costs are decreasing. Under this argument, VW's ability to build 30k+ car chassis + (complex combustion) engines + interiors, etc. each day is going to be challenged by what aspect of building these simpler electric cars? To date, EV sales are still a bit of chicken-and-egg, and Tesla does have a clear charger network advantage in parts of the world. But EV sales are a very small fraction of overall automotive sales, and until that changes, any doom and gloom on the traditional automakers is still exaggerated.

toomuchtodo 7y ago
Battery production. Battery manufacturers are extorting legacy automakers because they don't have their own capacity (LG Chem specifically). The bins you picked from before for ICE production are not the bins you pick from for EV production (for propulsion, at least). Tesla built GF1 in the Reno desert because, at the time (2013) [1], they forecast that at 500k/vehicles a year (which they're almost at), they would be consuming worldwide battery cell manufacturing capacity. And here we are with everyone else playing catch up trying to eek out the batteries they need to deliver EVs to compete against Tesla. [1] https://www.tesla.com/sites/default/files/blog_attachments/gigafactory.pdf https://www.tesla.com/sites/default/files/blog_attachments/g...
- Traster 7y ago
  I think one of the issues that should be worrying for Tesla, is that it's really Panasonic doing the heavy lifting on the battery side. I'm quite certain when it comes to it, Panasonic are going to be happy selling to Ford/GM/VW/BMW. It's true that Tesla is disrupting the automotive industry, but people don't really appreciate that the automotive industry involves thousands of suppliers of individual components that are then used to build a car by the manufacturers.
  - toomuchtodo 7y ago
    I'll worry about that when Ford/GM/VW/BMW makes an EV worth buying. Until then, the TSLA/Pano partnership seems to be working without issue. The special sauce is the cell chemistry and the battery management system, which Tesla owns.
    - notfromhere 7y ago
      Tesla/Pano have been having a lot of issues - a lot of it being on the Tesla side. Pano is no longer making those batteries just for cars because TSLA can't meet the volume needs
      - toomuchtodo 7y ago
        My understanding is that it's because Pano doesn't like Tesla's management style of the relationship (Pano prefers a loose feedback loop and team autonomy, Tesla wants it tight with rapid iteration and constant feedback up the chain), and that Tesla is about to scale up their own cell manufacturing. Feel free to throw citations in if you have solid evidence it's a demand issue, because Tesla sales figures and their last earnings call don't indicate that (their Model 3 backlog actually increased while deliveries also increased).
        reitzensteinm 7y ago
        Parent said nothing about demand.

013a 7y ago

VW is arguably in third place, which is not a bad place to be in. Tesla is obviously King. Toyota is doing fantastic. Nissan is pushing EVs, though the quality of their vehicles leaves something to be desired. VW is not behind most of the market; they're leading it. Tesla's huge early lead will stick around for a very long time, if not indefinitely. They'll become a player as big as VW and Toyota. But, these other manufacturers will catch up and begin to compete just fine. There's plenty of manufacturers that should be concerned (Ford being the biggest one). VW (and by extension, Audi, Porsche, etc) is not one of them.

tyfon 7y ago
Volvo also seems to be bringing the goods when it comes to EVs now in the form of Polestar 2 [1]. Personally I have been very positively surprised of Tesla after owning one for a few months and I it would take very much to make me give up all it's niceties but I think the Polestar is a sleeping tiger when it comes to sales. It seems to generate a bit of grass root buzz in the EV communities here in Norway. So some of the incumbents are finally taking the shift to new power trains seriously, but there will be slaughter for those who can't keep up in the long term. [1] https://www.polestar.com/cars/polestar-2 https://www.polestar.com/cars/polestar-2
- pbreit 7y ago
  Polestar is a low volume experiment and not even available yet. Volvo is way behind.
- ilikehurdles 7y ago
  This is the first I've heard of it and it looks absolutely amazing. An EV car with a fully-featured interior, reasonably long range, competitive price, and a design that doesn't look like something out of a circus sideshow. I'm really excited about what the EV market will look like next time I'm in the market for a new car.
- mensetmanusman 7y ago
  It's fascinating that a Chinese state backed enterprise purchased Volvo. I didn’t hear about it until this article, good move China!

mdorazio 7y ago

>How much of the ICE vehicle infrastructure and manufacturing capacity and know-how is going to be irrelevant in the EV world? Not very much. It really doesn't matter what kind of powertrain you have in your vehicles, the biggest part of the manufacturing process is everything else that makes up a vehicle. Frame, suspension, brakes, doors, windows, seats, dash, cabin interior, lighting, electronics, safety systems, sensors, testing, inspection, etc. etc. etc. On top of that, plenty of automotive plants these days get fully-assembled engines and sometimes driveshafts as well from other factories for efficiency and bolt them into vehicles rather than doing build-up from scratch. I've spent quite a bit of time in vehicle factories of several OEMs. I would estimate that less than a quarter of an average factory line is used for powertrain.

jcims 7y ago
That’s at the assembly plant though where the powertrain resolves to a few part numbers. In terms of R&D, warranty, service and overall longevity it represents a lot more than that.
- mdorazio 7y ago
  Agreed. Parts* & Service are two giant profit centers that take a big hit with EVs, which is one of the reasons dealers have been so resistant to selling them for years now. The actual manufacturing doesn't get a whole lot easier, though, which is one of the reasons there have been so many EV startup failures. *Note: Parts here means only powertrain parts. Tesla, for example, is notorious for having massive delays in repair parts availability for things like doors, trim, and windows.
- ilikehurdles 7y ago
  Companies like Toyota and VW roll out a new chassis once or twice a decade and you see some amount of shared powertrain parts everywhere from economy level to high-end performance and luxury models. They're really good at building common skeletons where every part of a car is pieced together like interchangeable legos. The research cost is high but the investment is inevitably returned with the scale and time available to these entities.

rolfmaoe 7y ago

Nearly all high precision sensors are made by BOSH which are also used in Tesla. Without these sensors, BMC circuits (also done in Germany) EVs will not take off.

carlsborg 7y ago

“As of December 31, 2018, our Research and Development departments employed 51,948 people (+5.3%) Group-wide or 7.8% of the total headcount.” They also spend €13.6 billion on r&d every year.

jryle70 7y ago
VW's revenue in 2018 is €235.85 billion so that means they spent 5.7% of revenue on R&D. For comparison, Nokia spent 11% of their net sales in 2007 on R&D, at the time when they appeared invincible, also the year iPhone was announced. Those huge numbers usually don't correlate with success.

ilikehurdles 7y ago

I think you're underestimating VW's understanding of the situation, but I do agree that lagging automakers are in for a world of hurt. I don't foresee Peugot-Chrysler (or whatever it's called by that time) surviving the EV revolution in its current form, and I'm pretty bearish on GM as well. VW group is pushing EVs via all of its major brands (VW, Audi, and Porsche at the very least). These models are also not being treated as one-off afterthoughts (GM style) or cars with a totally different design language from the core brand (BMW i3 style), but match the design language and performance characteristics that I would expect of each brand, all with increasingly impressive battery ranges. They have the global manufacturing/supply chain well figured out, design modular chassis that see use across almost every vehicle in its brands' portfolios over each decade, and this translates to getting nearly-unbeatable pricing from intermediate parts suppliers. Tesla has a lead on both the battery and software, but while other brands are catching up significantly on these fronts, Tesla does one thing better that I don't see any other manufacturer daring to tackle: vehicle purchases. Every stage of buying a car at a dealership is worse than the last, and maintaining these frustrating middle-men and their shopping lots full of unsold vehicles adds unnecessary cost to every vehicle's consumer price.