Why GM, Ford and VW Should Spin Off Their EV and Battery Units

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Why GM, Ford and VW Should Spin Off Their EV and Battery Units

On the last day of the third quarter, Volkswagen CEO Herbert Diess summoned around 120 of his top managers to a meeting at company headquarters in the north-central German city of Wolfsburg. Standing on stage, an animated Diess lamented that Tesla and China were badly beating VW in the electric vehicle race, according to accounts of the gathering. Tesla was outdoing the German icon specifically on one of its primary strengths–fast manufacturing, making its Model 3 sedans in half or even a third of the time it took VW to turn out a competing electric ID.3. A failure to do better could be existential for VW, Diess suggested. “We need a will to live,” he said.

The same dual specter may be spooking establishment automakers everywhere—an ever-mushrooming Tesla, gushing cash and on track to deliver well over a million EVs next year, and hypercompetitive Chinese EV makers selling vehicles in Europe and most likely headed to the U.S. next.