According to [1] Volkswagen was the third largest producer of EVs in 2022, only behind BYD and Tesla. It's not like they have been sitting on their hands or would just die. The problem is not so much the automakers themselves, but their suppliers. Those employ far more people, and EVs just don't need a lot of those parts.

1: https://www.ev-volumes.com/wp-content/uploads/2023/02/WW-S3-...