Volkswagen’s layoffs and profit collapse reveal a deeper story about electric vehicles, energy policy, artificial intelligence, and the global competition shaping the future of the automobile
By the Craig Bushon Show Media Team
Over the past several years on The Craig Bushon Show we’ve talked frequently about a major shift unfolding in the global economy—one that many people are only beginning to notice. It’s happening inside one of the most important industries in the world: the automobile industry.
Recently, one of the largest automakers on the planet delivered another signal that this shift is accelerating.
Volkswagen Group has announced plans to cut roughly 50,000 jobs by 2030. To put that number into perspective, that represents approximately seven percent of its global workforce. When a company employing nearly 700,000 people begins planning workforce reductions on that scale, it is not simply trimming expenses. It is responding to a fundamental change taking place inside the industry itself.
At the same time, Volkswagen’s profits have taken a significant hit as the company navigates the expensive transition toward electric vehicles while facing growing competition in China, the world’s largest automobile market. Even Porsche, historically one of the most profitable brands in the global automotive sector, has seen margins collapse after aggressive investments tied to the electric vehicle transition.
Those developments are not isolated corporate problems. They are signals of a much deeper shift that has been building quietly for decades.
The headlines today focus on electric vehicles, layoffs, and corporate restructuring. But the story underneath those headlines stretches back many years and involves a strategic decision that China made long before the rest of the world began seriously debating the future of transportation.
Electric vehicles are often presented as an environmental policy debate, but they are also part of a global industrial strategy—and China recognized that long before much of the world did.
For decades, Western automakers dominated the global automotive industry through their expertise in combustion engine technology. Designing reliable engines, transmissions, and mechanical systems requires decades of engineering knowledge and manufacturing experience. German, Japanese, and American automakers spent generations refining those technologies.
China recognized something important about that reality.
Trying to compete head-to-head with the West in traditional combustion engines would have required catching up to nearly a century of engineering development. Instead of competing directly in that arena, Chinese planners began focusing on the next generation of vehicle technology—electric vehicles.
Electric vehicles represented a technological reset.
While EVs still require advanced engineering, they rely far less on complex combustion engines and mechanical drivetrain systems. Instead, electric vehicles depend heavily on batteries, power electronics, and supply chains for critical minerals. That shift opened a strategic opportunity for countries willing to invest early in those technologies.
Beginning in the early 2000s, China started investing heavily in electric vehicle research and battery development. Over time, the government introduced major subsidies to encourage EV production and adoption. Chinese companies began building battery factories, securing mineral supply chains, and scaling manufacturing capacity.
Then in 2015 China launched its “Made in China 2025” industrial policy, which explicitly identified electric vehicles and advanced battery technologies as industries China intended to lead globally.
None of this was hidden.
While Western companies were still generating strong profits selling combustion-engine vehicles across the world, Chinese manufacturers were quietly building the supply chains that electric vehicles would eventually require.
Today, those investments are beginning to pay off.
Battery production—one of the most expensive components in electric vehicle manufacturing—is now dominated by Chinese companies. Batteries alone can represent roughly thirty to forty percent of the cost of building an electric vehicle. Control over battery production and mineral processing therefore creates a major economic advantage.
Chinese companies have also built enormous manufacturing scale in the EV sector. China is now the largest electric vehicle market in the world, allowing domestic manufacturers to spread costs across large production volumes. High manufacturing scale reduces the cost per vehicle and allows companies to compete aggressively on price.
Industry analysts frequently estimate that Chinese electric vehicle manufacturers can build comparable vehicles roughly twenty to thirty percent cheaper than many Western competitors.
The global race for electric vehicles is not just about cars. It is about who controls the energy systems, supply chains, and technologies that will power the next century of economic growth.
At the same time, many Western automakers were heavily dependent on the Chinese market for profits. Companies such as Volkswagen, BMW, and General Motors sold millions of vehicles in China and generated substantial revenue there for decades.
That success created a strategic blind spot.
When an existing business model is highly profitable, companies often assume that the conditions supporting that model will continue indefinitely. Meanwhile, competitors may be quietly preparing for the next technological transition.
Now that the electric vehicle transition is accelerating, those long-term strategic investments are beginning to reshape the competitive landscape.
Western automakers must now invest tens of billions of dollars into electric vehicle development while competing against companies that have already built significant cost advantages in battery production, supply chains, and manufacturing scale.
That combination places enormous pressure on profit margins and corporate strategy.
Volkswagen’s layoffs and profit challenges are one example of that pressure beginning to surface. The company is restructuring its workforce, reassessing investment priorities, and attempting to navigate a rapidly changing automotive marketplace.
Another important part of this story involves energy.
Electric vehicles may eliminate gasoline from the vehicle itself, but the electricity that powers those vehicles still has to come from somewhere.
Electric cars don’t eliminate energy demand. They simply shift it from gasoline pumps to power plants.
Building a large electric vehicle ecosystem requires enormous amounts of reliable electrical generation capacity.
And this is where a major policy contrast between China and the West begins to emerge.
While many Western governments have been shutting down coal-fired power plants and restricting the construction of new ones, China has been moving in the opposite direction. Over the past decade, China has approved and constructed hundreds of new coal-fired power plants while continuing to expand its overall electricity generation capacity.
Analysts estimate that China accounts for roughly three quarters of new coal power construction globally.
That massive expansion of energy capacity provides an enormous advantage for energy-intensive industries such as battery manufacturing, mineral refining, and electric vehicle production.
Artificial intelligence may be the most powerful technology of the next generation, but it runs on something far more basic: electricity.
Training advanced AI systems requires enormous computing clusters running thousands of processors simultaneously. The newest AI data centers can consume as much electricity as small cities.
As artificial intelligence expands across industries—from finance and healthcare to manufacturing and national defense—the number of these facilities is expected to grow rapidly.
This means the global race for artificial intelligence leadership is also becoming a race for electricity.
Every industrial revolution has been powered by energy. The next one may be powered by electricity at a scale the world has never seen before.
There is also a geopolitical dimension to this strategy.
China is the world’s largest importer of crude oil. For decades, global oil markets have largely operated through a system where petroleum is priced and traded in U.S. dollars.
Electric vehicles change that dynamic.
If transportation shifts from gasoline to electricity, countries can substitute domestically generated power for imported petroleum.
That shift reduces reliance on global oil markets and the shipping routes required to transport that oil across the world.
When transportation becomes electric, the countries that control electricity generation and battery supply chains gain the same strategic influence that oil producers held during the petroleum age.
Another dimension of this strategy involves critical minerals and global supply chains.
Electric vehicles require significant quantities of lithium, cobalt, nickel, graphite, and rare earth elements. Over the past two decades, China has invested heavily in securing access to these materials.
Chinese companies have acquired mining stakes across Africa and South America while simultaneously building large refining and processing facilities inside China.
Today, China controls a significant portion of the global processing capacity for several critical battery minerals.
Control over mineral processing gives China a powerful position within the global EV manufacturing ecosystem.
History offers a useful reminder about how transformative energy systems can be.
During the Industrial Revolution, the countries that controlled coal, steel production, and large-scale industrial power became the dominant economic forces of their time.
Energy has always been the foundation of industrial power.
In the 20th century, global power was shaped by oil. In the 21st century, it may be shaped by electricity.
But when you step back and really look at what’s happening here… a much bigger picture starts to come into focus.
Our Between-the-Lines Perspective:
The story unfolding in the global automotive industry is not simply about electric cars replacing gasoline engines. It is about long-term industrial strategy, supply-chain control, and economic competition between major economic powers.
China spent decades building the battery manufacturing capacity, mineral supply chains, electricity generation infrastructure, and production scale that electrified transportation and advanced technologies depend on.
Now that the EV transition is accelerating worldwide, those long-term investments are beginning to reshape the competitive landscape of the global economy.
The writing wasn’t just on the wall. It was in the battery factories, the mineral supply chains, the power plants, and the industrial strategies that were being built years before many people realized what was happening.
Because here on The Craig Bushon Show, we don’t just follow the headlines… we read between the lines to get to the bottom line of what’s really going on.
Disclaimer
This op-ed reflects commentary and analysis from the Craig Bushon Show Media Team and is intended for educational and discussion purposes. The perspectives expressed are based on publicly available information, industry reporting, and economic analysis available at the time of publication. Global automotive markets, energy systems, artificial intelligence infrastructure, and geopolitical dynamics are complex and evolving. The views presented are intended to encourage discussion and deeper analysis and should not be interpreted as financial, investment, legal, or policy advice. Readers and listeners are encouraged to conduct their own research and consult qualified professionals when evaluating economic developments, industry trends, or geopolitical issues.
