That is not entirely true. VW saw the risk and said that they could beat Tesla in three years’ time by producing a better electric vehicle than Tesla ever could due to their superior knowledge of vehicle construction and supply chain. They were too full of themselves.

We can ignore the early Tesla Roadster which was more a proof of concept and fun halo car than a daily driver for the masses. We can also ignore the EV1 with a far shorter range and a few compliance cars and experiments. Then there’s the model S which was available in Europe from 2013 which you could actually buy. There were barely any fast chargers at that point but the early Model S was a functional fast and cleverly packaged car for its time. It took a while for the masses to get convinced. I vividly remember driving that car at that time and the interest and questions people had.

VW did start development around 2013 it seems and it feels like they were targeting the cheaper Model 3’s future market rather than the much more expensive Model S. They saw the importance.

Where they failed was in building a feature complete car in due time. The ID3 was late and was functionally incomplete. I recall news articles of many produced ID3s waiting in the parking lot for engineers to update them. The ID3 was almost a prototype of what should have been. VW was right in that Tesla would not be able to get the factories up and running correctly, but by ignoring workers’ well-being Tesla did manage to produce. Quality control seemed non-existent but the car was for sale. The ID3 not.

Then there was the charging infrastructure which Tesla had largely set up at that time in a monopolistic way but VW did not have. People need that. One can argue that the Tesla Superchargers still provide a superior experience tot the alternative for other brands.

I don’t think they were blind. Neither was BMW for that matter and probably many others. I think they underestimated the value of the mix Tesla brought and the value of their supply chain. The Tesla was was fast but no one blamed you for it, it was a cultural icon, it was a very strong signal to move away from fossil fuels. A signal VW or any other brand had not dared to play in to. That makes it a tall order where you have to produce a superior offering and they failed at that. Even today Tesla’s vehicles have an efficient chassis design and you could only really destroy the company’s status by going openly against a human friendly stance (ie: Nazi style) or against an ecological stance which is what they did.

VW and many other makes because they were full of themselves. Nearly no new car maker succeeded in breaking into the market. Electric cars made that possible.