At the 3 Series comparison drive this summer, we put our xDrive All-Wheel Drive system to the test against our competitors. Watch to see which one came out on top.

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VW Group Components was formed in January after a carve-out process that took more than three years to complete. It now incorporates nearly 80,000 employees across 47 global locations building everything from driveshafts and dampers to front axles and steering columns.

Traditionally, the parts arm's main task was manufacturing more than 10 million combustion engines and transmissions a year. But as VW shifts to electric powertrains, that volume will have to be completely wound down by around 2040 — without causing a sustained hit to earnings.

According to sources, VW Group Components earns, on average, an operating margin of 4 to 5 percent, depending on the product. A tenth of its work force is slated to be eliminated in the next four years to protect that profitability. But a labor pact in Germany means layoffs at its high-wage sites in the country are not an option through the next decade.

Schmall declined to confirm VW Group Components' margin but said his aim remains to achieve the strategic target margin set by his bosses: 6 percent.

While he predicted suppliers making the shift to EVs would find it difficult to boost returns to more than 10 percent, he said VW could rely on growing volumes to help it through the transition.

"By 2025, our site in Kassel plans to manufacture up to 1 million electric drivetrains, making us one of the largest suppliers in the market. With those kinds of volumes, you shape the global competitive landscape," Schmall said.

The VW manager plans to invest about $3.96 billion through 2023 in the business's EV component operations, but that means funds will be limited elsewhere. To address that challenge, he made a deal to combine VW's conventional steering business with Japan's NSK to share costs. This will allow the operation to focus on the steer-by-wire technology needed to address another megatrend: the move toward self-driving cars.

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Ford spokesman Mike Levine did not respond to a request for comment, but tweeted out a GIF of a laughing Ryan Gosling.

Analysts following the reveal were skeptical the vehicle could make a dent in the lucrative pickup segment, especially with Ford and General Motors both working on their own electric pickups.

GM CEO Mary Barra said the automaker's first electric pickup truck model will go on sale in the fall of 2021. "It will be a very capable truck, I'm pretty excited about it," Barra said at an investor conference in New York on Thursday.

Ford aims to sell an electric F-series in late 2021, Reuters reported.

Electric pickups and SUVs could help Ford and GM generate the significant EV sales they will need to meet tougher emission standards and EV mandates in California and other states. The Trump administration is moving to roll back those standards, but electric trucks are a hedge if California prevails

Demand for full-size electric pickups in the near term may not be huge. Industry tracking firm IHS Markit estimates the electric truck segment - both full- and midsize models - will account for about 75,000 sales in 2026, compared with an expected 3 million light trucks overall. The Tesla pickup is not part of that estimate.

Tesla's pickup "will be a niche product at best and poses no threat in the pickup market as we know it today," Matt DeLorenzo, senior executive editor at Kelley Blue Book, said in a statement. "The other downside is that this truck will have no federal tax credits by the time it comes out.”

Tesla's Model 3 sedan is the world's top-selling battery electric car. The California-based automaker has so far sold mostly Model S and Model 3 sedans, but also offers the Model X SUV and starting next year the Model Y compact SUV.

Reactions on Twitter ranged from love to hate of Tesla's sharply angled vehicle.

"I just watched tesla release the #cybertruck and honestly? My life feels complete," wrote @aidan_tenud, while @nateallensnyde wrote "Its nice to see Elon Musk make a cardboard box car he drew in kindergarten."

Musk earlier tweeted that the design was partly influenced by the Lotus Esprit sports-car that doubled as a submarine in the 1970s James Bond film "The Spy Who Loved Me" as well as by the movie Blade Runner.

Reuters contributed to this report

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