To VW’s CEO, High-Profit Perspective Is Driving Tech Companies Into EVs

Volkswagen New Auto Strategy 6 photos
Photo: Volkswagen
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Events such as the Volkswagen New Auto strategy presentation offer a fantastic opportunity to understand what is going through the minds of the most influential executives in the industry. Herbert Diess even said he could tell us what is driving Apple and Foxconn to try to build and sell cars. Although the answer seems obvious, it was interesting to learn that the Volkswagen Group CEO believes these tech companies are pursuing massive profits.
Diess said that Volkswagen named its strategy until 2030 as “New Auto” because cars would be here to stay. According to the executive, there’s no reason to believe they will vanish, as die-hard environmentalists wish. Buses, trains, and bicycles cannot offer the same convenience an automobile does. That said, the future will be promising for cars, in Diess’s words.

“Industry’s revenues are going to double in size compared to today. The automotive market is projected to total $5 trillion by 2030. It is ten times as much as the smartphone market. That explains why big tech players want to enter our industry.”

Electric cars may help newcomers enter the automotive industry. Still, Volkswagen believes legacy automakers have an edge because this business is way more complex than most of these companies would imagine. Even Elon Musk recognized that achieving mass production with vehicles is an arduous task.

Despite that, Diess believes revenues for the automotive industry will shift. Moving from ICE vehicles to electric cars is just the first step. Selling EVs will then allow software to become a source of income. Eventually, software will make services help these companies earn their bread. Those three factors are what will help the automotive industry make more money than it currently does.

While Apple is not clear about its plans to build an electric car, Foxconn has already presented its MIH Open EV platform and even its own car brand, Foxtron. Volkswagen is not willing to wait for what they may offer: when they introduce their contenders, the German carmaker intends to be more than ready.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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