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Elon Musk Warns Volkswagen Risks Extinction Without Faster EV Push

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Comments from Tesla CEO Elon Musk highlight growing concerns about traditional automakers like Volkswagen failing to adapt quickly enough to electric vehicles. Musk warned that VW could face extinction if it doesn’t accelerate the transition.

The blunt remarks follow a German EV enthusiast posting that VW claims it can’t profit from EVs and has slowed new EV models. “Volkswagen is dead,” another user reacted, spurring Musk’s dire forecast.

Elon Musk Warns Automakers Face “Kodak Moment” If They’re Too Slow on EVs

Musk has repeatedly criticized the pace of change at legacy car companies compared to Tesla’s relentless focus on EVs and autonomy. He recently said their rate of change remains very slow despite understanding the need to adapt.

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While VW has ambitious targets for EVs to comprise 50% of sales in the U.S. and China by 2030, near-term results lag rivals. EV share reached just 7.9% in Q2 2023, up modestly from 5.9% last year.

Chinese electric upstarts like BYD and Nio are rapidly expanding model lineups and looking to Europe as China’s economy slows. These agile startups can outpace VW’s pivot towards EVs, leaving the German giant trapped in the fading combustion engine market.

Deep organizational complexity makes change difficult for a conglomerate of VW’s size. Infighting between brands and key executives recently forced out VW’s CEO. Layers of bureaucracy and factory politics impede fast adaptation.

At the recent Munich Auto Show, BYD unveiled EVs aimed directly at VW’s core offerings. The pace of competition highlights how VW risks losing its technology leadership position built over decades.

Radical proposals like splitting VW’s brands into standalone companies have emerged to accelerate responsiveness, very structure of VW’s sprawling business may now work against pivoting rapidly.

While VW’s scale could still make it a EV powerhouse long-term, Musk’s criticism underscores doubts about its short-term vision. To avoid extinction, VW may need bolder restructuring to compete in the dawning electric age.

Related Posts: Volkswagen Launches Production of VW Electric ID.7 Sedan in Germany

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