What would the appropriate strategy have been after realizing China had decided to squeeze foreign cars out of the market? The "obsolete business model" still sells many cars world-wide.
How can manufacturers fight EV adoption? If an EV is a superior offering it will find its market. Germans are free to buy Teslas, BYDs or domestiv EVs. There are reasons why the EV market share in Germany was still only 4.1% in 2025 (most likely: high electricity prices, relatively low gasoline price) but manufacturers "fighting adoption" is not one of them.
Domestic auto manufacturers can also set high prices on their EV offerings to prevent them from effectively competing and lobby the government to put high tariffs on competitive foreign EVs, or even completely block them at the border.
People will come in to say that the batteries are inherently expensive, but that's not really true anymore. Manufacturing costs have plummeted over the past few years, but you wouldn't know that in the west.
I think it is a market failure that there have not been more Tesla-like startups that come in to eat their lunch. I get that even when you don't need to make an engine the startup costs are high, but there is a crapton of money sloshing around the markets right now looking for the next big company. We need someone with the gumption to execute.
There must be more to it. German automakers did belong to the top 10 (for some periods even top 5) R&D spenders world-wide. It seems they just did not spend it wisely. Similarly, the claim they "kept wages down" seems to require some nuance. VW workers are known to be very well paid.
From the outside it seems like these companies became large behemoths who were not able to spend their R&D money wisely and their outsized pay packages forcing them to offer their products at uncompetitive prices.
As a university computer scientist, I saw our graduates hardly getting job in automotive directly while mechanical engineers got all the good jobs for years. Then about 10 years ago the opposite happened: people quit their PhDs because industry was hiring as many CS /AI people they could get. Industry understood that they needed to invest (even it was already a bit late). However, they IMHO failed to turn scale that talent into sustainable innovation. Many people I know left again automotive. I think industry struggled quite a bit to translate engineering leadership to a digital age in many parts. I think it was easier for pure EV manufacturers to embrace also other digital innovations.
Software need to interface almost all parts and electronics in a vehicle. Since car makers outsourced these parts, interfacing them took a lot of work. Here manufacturers like Tesla were clearly at an advantage since they controlled all components.
That is a nightmare situation for software that already started later in the development process.
The internal EU market is bad (demand is low), the export markets are sensitive and competitive, and traditional Western companies are inefficient. (Which was okay as we were coasting on the post-WW2 globalization economic miracles.
But the inability and unwillingness to let the failing (uncompetitive) companies and industries go (France has a huge problem with this too) led to being stuck between a rock and an eventual hard place.
I see where Simon is coming from with these patterns but I wonder where large software companies stand regarding their agentic engineering practices? Is Google creating in-house code using agents against its monorepo? Has Microsoft outsourced Windows source code advancements to a dark factory yet?
This is going on for decades and I wonder what the actual business model for the EU economy is in the future. With all factories soon gone, will Europe rely on agriculture, tourism and some services only? Back to a "developing country" economy?
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