I by IMD Book Club
Innovation
EVs accelerate the great automotive rewiring
IMD’s Mark Greeven was joined by Reuters US autos journalist Mike Colias to discuss his new book Inevitable: Inside the Messy, Unstoppable Transition to Electric Vehicles, which explores how the development of...
IMD’s Mark Greeven was joined by Reuters US autos journalist Mike Colias to discuss his new book InEVitable: Inside the Messy, Unstoppable Transition to Electric Vehicles, which explores how the development of electric vehicles is revolutionizing the global auto sector.
They just said, ‘EVs are boring.’ They weren’t anti-EV, and they knew it was a great technology. They just weren’t interested. They couldn’t apply their creativity and know-how to that technology.Mike Colias
The internal combustion engine (ICE) won the first battle of the autos in the 1890s, and electric vehicles (EVs) were the also-rans; now the tables are turning – and fast – in one of the most fundamental transitions of any industrial sector.
Colias’ book emerges from two decades of business journalism, including more than a decade covering the automotive industry. As a Reuters journalist focused on US autos, he brings an insider perspective to examine one of the most emotionally charged industries in the world – one undergoing what he calls “the biggest change in its 120-year history.”
The transformation encompasses not just the cars themselves, but the complete rewiring of a century-old industry across multiple countries – from the US to Japan and Germany to China.
The ‘boring’ revolution
A microcosm of the automotive sector’s transformation is characterized in the cubicles of Ford’s powertrain engineers – the people whose careers were built on the art and science of combustion engines.
These were men for whom engine development wasn’t just a job but a core part of their identity. The internal combustion engine, with its hundreds of moving parts and complex supply chain, represented more than a century of accumulated knowledge. Engineers competed on refinement – making engines smoother, quieter, and more fuel efficient – and became the rock stars of their companies.
“They look at it like it’s more art than science,” Colias explains. “They bring a lot of creativity to it.”
When Ford began shifting capital spending from combustion engines toward EV programs in the late 2010s, these engineers felt marginalized almost overnight. Electric cars were perhaps less than 1% of Ford’s global sales, but inside the company, massive disruption was already underway.
Some engineers attempted to reskill, but for many, the transition proved impossible – not because they lacked capability, but because they didn’t think it was interesting.
“They just said, ‘EVs are boring.’ They weren’t anti-EV, and they knew it was a great technology. They just weren’t interested. They couldn’t apply their creativity and know-how to that technology.”
Both engineers Colias interviewed took buyouts in their 50s rather than work on EVs. Interestingly, Ford has since hired one back as a consultant – a tacit admission that combustion engines will remain relevant longer than the company originally anticipated.
The latest market data shows 40–50% of new vehicles in China are EVs. That’s a head-spinning disruption of the
industry.
Taking the long view
While individual careers were being disrupted, a much larger strategic game had been unfolding for two decades. Perhaps the most surprising revelation in Colias’ research was the role of patient, deliberate industrial policy at the government level – particularly in China.
In the 1980s and 1990s, when China opened its economy, it invited major automakers like General Motors, Toyota, and Volkswagen to set up operations – but only under the condition that they partner with Chinese companies. These joint ventures existed for decades, but Chinese brands couldn’t crack the code of the internal combustion engine. It was simply too complex, with its vast supply chain and decades of accumulated refinement knowledge.
Consequently, in China in the early 2000s, policymakers made a conscious decision: the only way to close the gap with established automakers and overtake them was to go electric.
What followed was a 20-year commitment that would have seemed impossibly long-term by Western standards. The Chinese government offered incentives for companies to manufacture electric cars and for consumers to buy them, while investing heavily in charging infrastructure – with 25 times more fast chargers in China today than are available in the US.
“It did not take off for a couple of decades,” Colias observes. “By 2018–2019, EVs or plug-in hybrids made up less than 5% of sales in China.”
“The latest market data shows 40–50% of new vehicles in China are EVs. That’s a head-spinning disruption of the industry.”
This rapid acceleration caught the entire global automotive sector off guard. But it also created problems. “It’s a mess in China; older ICE factories and newer EV manufacturers are together capable of manufacturing 50 million cars a year – twice the annual domestic demand,” Colias notes. “Overcapacity and price wars are driving Chinese manufacturers to export aggressively to absorb that excess production capacity.”
The catalyst
While China’s industrial policy laid critical groundwork, Tesla made electric vehicles desirable, practical, and impossible to ignore. The company defied conventional wisdom that startup car companies couldn’t possibly succeed against century-old barriers to entry.
“It’s hard to overstate the role that Tesla played in getting the rest of the industry going down the path of electrics,” Colias emphasizes.
For years, established manufacturers dismissed Tesla as a curiosity that would never achieve scale or profitability. But when Tesla’s market capitalization eventually exceeded the next 10 auto companies combined, the industry could no longer look away.
Beyond market valuation, Tesla demonstrated a fundamentally different approach to automotive engineering and offered the prospect of growth to investors. The company built cars as software platforms that could be updated like smartphones – something unthinkable for traditional manufacturers whose software was embedded deep in mechanical systems.
profit testing organization, Consumer Reports criticized the Model 3’s braking distance. Rather than issuing a recall or waiting for the next model year, within days, Tesla issued an over-the-air (OTA) software update that improved mechanical braking performance.
“Making the car updatable, like a smartphone, is something that the legacy car companies never thought to do and still are struggling with.”
Today, Elon Musk’s focus has shifted beyond the EVs themselves. “If you listen to Elon Musk today, it’s almost like he doesn’t own a car company,” Colias notes. The bet now is on autonomy, robotaxis, and mobility as a service. Whether or how that future materializes remains uncertain, but billions of dollars are being wagered on it.
Clean sheet advantage
Chinese EV startups adopted a clean-sheet approach, building digital platforms from the ground up. These younger companies, many founded in the last decade, cut typical development times for new car models in half – from five years to just over two – and added technology and features at unprecedented speed.
The case of Xiaomi exemplifies this new paradigm. The smartphone manufacturer entered automotive manufacturing just two years ago and is already producing over 100,000 cars annually. Their calling card isn’t traditional automotive excellence – it’s the technology inside.
“In China, there’s more demand for that,” Colias explains. “The consumer wants cutting-edge interoperability. They want to pull into their drive and have the lights in their house come on because the car just told them to.”
The ecosystem challenge
The EV transition extends far beyond automotive companies to encompass an entirely new infrastructure ecosystem. While level two chargers are appearing at grocery stores, coffee shops, and banks – adding 20–30 miles of range during an hour-long stop – the critical infrastructure needs are at home and on highways.
Colias profiles entrepreneurs working behind the scenes: one installing fast chargers along desolate Oklahoma highways, another equipping apartment buildings and condominium complexes with charging infrastructure, having raised tens of millions in venture capital.
“Everyone agrees it’s needed,” Colias observes, “But the economics of charging make it difficult. It’s hard to make money.”
One concern that looks like it’s less problematic than expected is electrical grid capacity. While AI data centers are creating serious power generation challenges, EVs have not become the strain many predicted. Cars generally trickle-charge with low voltage overnight, so current grid infrastructure can handle the transition to 20–30% EV market share in developed countries without major upgrades.
Looking ahead, Colias sees the competitive race shifting. The electrification of vehicles has become a ‘table stake’ – a requirement rather than a differentiator. The new frontier is the technology embedded in EVs: autonomous driving, robotics, and artificial intelligence. “That’s where the race is now,” he concludes.
Strategic lessons
For contemporary business leaders facing platform shifts in their own industries, Colias identifies two critical lessons from automotive’s transformation.
First, humility. The automotive industry’s size, power, and century-long profitability bred the attitude that a startup couldn’t possibly succeed. “Maybe a little bit of humility might have gone a long way,” Colias suggests. Leaders need imagination to explore paths that seem unlikely but possible; to ask, “What if?” even when the answer seems absurd.
Second, customer focus. When major manufacturers leaped from dabbling in EVs to declaring them their entire future around 2018–2019, many failed to consider customer readiness. General Motors executives, for instance, dismissed hybrids as an unnecessary interim step when the end game was clearly EVs.
“They lost sight of the customer in that decision – and now they’re paying the price because the transition is not playing out as quickly in the US,” Colias notes.
But one conclusion seems inescapable: the question is no longer whether electric vehicles will reshape the industry, but how – and which companies will successfully orchestrate the rewiring of expertise, infrastructure, and identity that this transition demands.
For industries watching from the sidelines, automotive’s struggle offers a preview of what platform shifts look like when they finally arrive: faster than expected, messier than planned, and deeply human in their disruption.
Quick fire: Three questions with Mike Colias
Which company surprised you the most?
Among legacy manufacturers, one company managed to bridge old and new: Hyundai, and its sister company, Kia. It went from being a budget car company to really embracing not just electric cars, but both plug-in and regular hybrids. They’ve got a full spectrum. Their designs have also improved over time, and it’s really the hot brand right now, at least in the US.
What’s the one question every board should be asking in 2026?
“What are we doing to compete against China?” Right now, there’s a remote possibility that Chinese cars could show up on US shores. But maybe people thought that in Europe five years ago, and now it’s happening every day. All boards in the automotive space are trying to figure out how to fend off this threat.
A prediction you’re willing to be wrong about?
The percentage of new car sales that are going to be electric in each region in 2030.
· China is 40–50% now and will grow to 75%.
· The US is 8–9% now and will increase to 15–18%.
· Europe is in the 15–20% range now and will be up to 30%.
That’s a parlor game that everybody who covers the industry likes to play. And we get it wrong all the time.
Expert
Authors
