The Secret to EV Success Is the Software
Following Tesla’s lead, Volkswagen is building out expertise in-house to avoid the fate of the original cellphone makers.
There’s a common misconception about what makes electric vehicles so disruptive. Automakers have long considered their core technology to be the powertrain—essentially the engine and transmission. For all of the components they bought from suppliers, it was a pretty safe bet that premium carmakers in particular would assemble the powertrain themselves. That, they thought, is what set them apart. Thus, BMW AG’s advertising slogan is “Freude durch Fahren” (“joy through driving”).
Electric vehicles are changing that, not because electric powertrains are better, but because, with a few exceptions at the superhigh end, they’re all broadly similar. The driving experience in an electric BMW differs little from that in an electric Cadillac. That’s the problem: The powertrain has ceased to be the differentiator.