The era of the classic car makers is over, according to the chief executive of one of world’s largest manufacturers, VW.

Speaking at an internal meeting on January 16, Volkswagen’s Herbert Diess warned that the world’s largest carmaker will have to “slaughter some sacred cows” and transform itself into a technology company to avoid becoming another Nokia, which lost its dominance in the handset market to Apple.

Diess lambasted the lack of urgency within VW’s ranks, saying that the shift to electric vehicles would require “a radical change of direction and that if VW continued at its current speed, things would be very tough.

“We are valued like an automobile company, while Tesla is valued like a tech company,” said Diess, who emphasised that software expertise would determine VW’s future success. “The storm is just beginning,” he added.

Whether Diess’ predictions come true remains to be seen, but there can be little doubt the global auto market is going through a period of upheaval. This is evidenced by the rise of companies like Tesla, which has come from producing a niche roadster a decade ago to becoming one of the major players in the EV market – albeit mostly without profit. As companies merge and platform sharing increases, the loss of traditional names becomes a very real threat. We could also see EV componentry shared across different brands to cut costs.

Despite the concern from its chief executive, VW has reported record sales for 2019, selling almost 11m vehicles despite a slowdown in China. The manufacturer’s first dedicated emissions-free vehicle, the ID.3, is already rolling off production lines and will go on sale this year.