The transition from internal-combustion-engine (ICE) vehicles to battery-electric vehicles (BEVs) is the defining challenge of the auto industry this decade. Legacy automakers—Ford, General Motors, Volkswagen, Toyota, Stellantis, Daimler and others—have scale, factories, supplier relationships and brands that new EV startups envy. Yet many also carry heavy legacy costs, cultural inertia and engineering architectures designed for engines and transmissions, not electric drivetrains and software-defined vehicles. That combination produces both costly missteps and decisive wins.

What they’re doing wrong

1. Treating EVs like ICE cars (not reimagining product architecture)

One of the most common mistakes is shoehorning electrics into platforms and processes designed for ICE vehicles. The clean-sheet potential of BEVs—packaging a flat battery under the floor, rethinking cabins, simplifying drivetrains—is often squandered when legacy firms attempt to adapt old platforms or bolt EV hardware onto ICE assembly lines. That slows down weight optimization, range efficiency and cost reduction.

When companies try to support both ICE and BEV manufacturing with shared architecture, they compromise both: complexity rises, production costs stay high, and the customer doesn’t get the full advantage of EV packaging or reduced wiring harnesses. The industry learned this the hard way with early hybrid-era compromises—and the lesson repeats unless firms commit to dedicated EV platforms.

2. Underestimating the importance of software and user experience

Tesla’s advantage wasn’t only batteries and range; it was an integrated software stack (OTA updates, centralized vehicle control, cohesive UI) that most legacy OEMs didn’t have. Many traditional automakers still rely on a patchwork of supplier software modules that don’t speak to each other well—slower feature rollout, inconsistent UX and higher warranty costs. Recent efforts to build centralized architectures have been started but are expensive, risky, and slow. Ford’s cancellation of a major next-gen electrical architecture project earlier in 2025 illustrated how difficult and costly this pivot can be.¹

3. Failing to prioritize affordability and the mass market

Legacy players often chase premium EVs (large crossovers, luxury sedans, electric trucks) to preserve margins—but the fastest adoption globally is coming from lower-priced, practical models. China’s market shows how smaller, affordable EVs can accelerate volume adoption. By over-indexing on premium positioning, many OEMs risk ceding mass-market share to Chinese brands and new players who can deliver lower-cost, locally optimized EVs.²

4. Slow or fragmented battery strategies

Battery chemistry choices, cell suppliers, and manufacturing strategy are existential in a BEV world. Automakers that waited or hedged have paid a price. Some have stuck to legacy supply models or promoted branded battery platforms that never achieved scale. Others flip strategies midstream—GM’s pivot toward lithium-iron-phosphate (LFP) cells to drive cost down is an example of adaptation, but it also highlights the turmoil and rethinking that occurs when initial plans don’t match market economics.³

5. Over-promising advanced autonomy and monetization too soon

Many OEMs attempted to monetize advanced driver assistance or autonomous features prematurely, making marketing claims they couldn’t keep. The result: regulatory headaches, consumer distrust and wasted R&D cycles chasing an elusive full self-driving product rather than incremental safety and convenience improvements that buyers actually want today.

6. Cultural and organizational inertia

Re-tooling factories, retraining workforces, and shifting supplier relationships are huge change-management problems. Some legacy firms still have enterprise structures and KPI systems optimized for ICE profit pools—aftermarket parts, dealer service revenue, long product cycles—creating resistance to EV economics where software, subscriptions, and different maintenance patterns matter.

What they’re doing right

1. Leveraging manufacturing scale and supplier relationships

Legacy automakers still have a huge advantage in manufacturing know-how, quality control, and distribution. When they commit—investing in gigafactories, retooling assembly lines, and renegotiating supplier agreements—they can scale quickly and achieve cost improvements through volume. Ford’s large investment to convert a long-standing Kentucky plant for EV production (including an adjacent battery facility plan) is the kind of decisive capital move that can deliver affordable EVs at scale.⁴

2. Brand credibility and existing customer base

Strong consumer brands and extensive dealer networks can be an advantage if repurposed for the EV era. Consumers trust brands they know; translating that trust into EV adoption is possible when product, pricing, and charging support align. Brand lineage—think Mustang nameplate on an EV—can ease consumer concerns and speed awareness.

3. Strategic partnerships to shore up weaknesses

Many OEMs are forming battery partnerships, joint ventures, and software alliances rather than going it alone. Collaborations with major cell manufacturers, investments in local battery plants, and alliances with charging networks reduce single-point risk and accelerate learning. Diversified sourcing is increasingly important as geopolitical frictions and concentrated Chinese production create strategic risk.⁵

4. Building transitional offerings (hybrids, PHEVs)

For markets where charging infrastructure lags or consumer hesitancy remains, hybrids and plug-in hybrids can maintain brand relevance and revenue while the EV ecosystem matures. Companies like Toyota have used this as a wedge to protect profitability while investing in long-term BEV tech. This balanced approach helps them remain financially robust during the transition.⁶

5. Prioritizing profitable product lines first

Some OEMs avoid trying to build a profitable BEV business by focusing on the highest-margin segments first—luxury crossovers, performance EVs—and using those profits to fund mass-market models and battery investment. This staged approach can protect balance sheets and provide breathing room to solve manufacturing and software issues.

What legacy automakers should do next — practical recommendations

Commit to true EV platforms and simplify complexity

If you can’t commit to dedicated EV platforms, you’ll always be half-swimming. Simplify variants, reduce wiring and module complexity, and optimize vehicle architectures around battery placement and thermal management. This directly reduces cost, improves range, and speeds up assembly.

Build or buy integrated software expertise

Either develop an integrated vehicle OS or acquire the talent and teams to manage one. The investment is large but fundamental: it reduces warranty costs, enables OTA updates, and allows recurring revenue via services. Don’t just bolt in third-party displays—own the user experience and data strategy.

Make the mass market the priority in product planning

Design a clear roadmap that covers affordable, practical BEVs for the widest audience, not only halo cars. Pricing parity or near-parity with ICE equivalents will be a turning point for adoption in large markets. The IEA and market studies show affordability is crucial for mass uptake.²

Harden the battery and supply chain strategy

Diversify chemistries with a pragmatic approach—use high-energy NCM/NCA where range and performance matter, but leverage LFP for cost-sensitive mainstream models. Localize cell production where sensible, and invest in recycling and second-life programs to reduce raw-material exposure. Recent moves by major OEMs to pivot battery strategy show this is urgent rather than optional.³

Invest in manufacturing transformation now and with conviction

Retooling factories is expensive and disruptive, but incremental fixes aren’t enough. If you plan to lead in EVs, invest in new assembly methods optimized for fewer parts, zonal ECUs, and streamlined processes. The companies that retooled early are already harvesting efficiency gains.⁴

Deliver charging and ownership simplicity

Partner with charging networks, provide predictable TCO messaging, and integrate charging into the sales experience. Consumers want real-world answers: where will I charge, how long will it take, and what will the total ownership cost look like over five years? Address those clearly.

Emphasize product quality and real-world range

Rather than chasing headline range numbers under ideal test cycles, optimize real-world range and efficiency at common driving speeds and temperatures. Improve thermal management, regen strategies, and aerodynamics—those incremental engineering wins add up.

Rework dealer and aftersales economics

Dealers have to be incentivized for EV sales and maintenance. Legacy dealer models often rely on service and parts—reconstructing revenue models (training, new warranty handling, battery servicing) is critical to avoid resistance at the point of sale.

The long game: culture, metrics and leadership

The transition to BEVs is partly technical and partly cultural. Leadership needs the courage to change incentives, accept short-term pain for long-term benefit, and reward cross-functional delivery (software + hardware + services). KPI systems that measured dealership profit per vehicle need to evolve to measure software engagement, recurring revenue and lifetime customer value.

Autonomy, connected services and energy integration (vehicle-to-grid) are big opportunities. But chasing every shiny possibility without first solving the basics—affordable batteries, reliable software, and scalable manufacturing—will fragment resources and delay profitability. McKinsey research highlights that consumer concerns (range, price, charging) remain top barriers to adoption; address those first, then layer on advanced features.⁷

Conclusion — a pragmatic finish line

Legacy automakers have every chance to win the EV era—but only if they confront their legacy honestly. The right moves combine industrial strength (scale, OEM manufacturing competence) with new capabilities (software, battery cell strategy, simpler product lines and pricing for the mass market). The wrong moves are familiar: treating EVs like ICE cars, underinvesting in software, and prioritizing image over mass-market affordability.

We’re in a multi-speed transition. Some firms will sprint to high-margin EVs and software services; others will focus on hybrids or local strategies. The winners will be those who pair the hard, often unglamorous work of manufacturing reinvention and supply-chain resilience with bold investments in software and affordable EV products—while being ruthless about cutting complexity and cost. The EV future rewards agile, integrated thinking; legacy scale is an advantage only if it’s wielded with modern tools and a willingness to break old rules.

Sources

[1]: Reuters: "Ford kills project to develop Tesla-like electronic brain"

[2]: IEA: "Cheaper electric cars: the key to unlocking mass-market ..."

[3]: The Verge: "GM's Ultium battery gets the ultimatum"

[4]: AP News: "Ford hits the pedal on EV production with $2 billion overhaul of Kentucky plant"

[5]: oxfordenergy.org: "2025 EVS AND BATTERY SUPPLY CHAINS ISSUES AND ..."

[6]: AInvest: "Automotive Industry's Strategic Shift: Hybrid and Affordable ..."

[7]: McKinsey & Company: "New twists in the electric vehicle (EV) market"