Part 1/5:

The Looming Collapse of Legacy Automakers

Two years ago, I discussed the impending troubles facing legacy automakers due to the electric vehicle (EV) transition. It wasn't about them losing money on EVs or their lack of expertise in software - it was about the massive costs of winding down internal combustion engine (ICE) production and refurbishing their factories to produce EVs instead.

Volkswagen's experience in 2019 showed just how costly this process can be. Refurbishing their Zwickau factory to produce EVs cost them $1.3 billion, and the factory still takes three times longer to produce an ID.3 compared to how long it takes Tesla to produce the Model 3. This is not an asset, but rather a massive expense that legacy automakers will have to bear.

The Ripple Effect Through the Supply Chain

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