It is a deliberate decision.
This is exactly the problem, and then some.
It's not just that the incumbent car industry fears cannibalising sales of conventional models, but also their multibillion dollar, multi-decade investment in ICEs and conventional powertrain technology.
They were (rightly) confident in their hard-won expertise. For the past few decades, they've been concentrating on their core competencies and outsourcing everything else. The miscalculation is obvious in hindsight, but I can understand how they missed it.
Pushing money and expertise for non-core engineering out to third parties saved money, at the cost of removing some barriers for new competitors. Not to worry, as they'll need
all the bits of a car, properly integrated, to compete.
At least some engineers – and maybe even some executives – were surely aware that electric powertrains had the potential to make ICEs obsolete. But incumbents were strongly motivated not to develop them, and nobody believed a newcomer would be able to produce a marketable vehicle. Then along comes Tesla.
Tesla arrive with a radically different and inherently superior powertrain, and leapfrog over the industry’s very best products. Suddenly, ICE technology seems on the verge of obsolescence. Tesla’s money is as good as anyone else’s to all those third party suppliers who make the other bits of a car. Being leaders in a new and much-desired direction for automotive technology, Tesla attracts the best engineers. A generation of students start to dream about following them.
It has begun, and cannot be stopped. But it can be resisted.
Expanding EV sales threaten to turn what seemed like a safe strategy into economic torture for the incumbents. They would very much like this innovation and growth to slow down, giving them plenty of time to ameliorate their losses writing off ICE technology assets. Don't expect them to help willingly with Tesla's objective.
They'll do everything they can to buy more time, while desperately preparing for a transition they hoped would not come for decades.
This revolution had to come from either regulation compliance or competition from a newcomer. Government turned out to be weak and corrupt, so thanks again to Tesla for making it happen the other way.