In Auto Industry Split, GM and Volkswagen Cut Hybrids From Future
The two automakers are shifting focus to all-electric vehicles
As we’ve noted before, we are in the midst of the biggest shift in the automotive industry since the Model T. Electric vehicles are seen as the inevitable future, but the question is when that time will come. Do automakers invest heavily in EV tech and risk it falling flat? Or do they gradually roll it out over many years and risk someone else cracking the mass-market code first? We finally have some answers.
In a new report in The Wall Street Journal, the industry is shown to be splitting into two factions. Volkswagen and General Motors are both choosing to heavily invest in fully electric cars instead of hybrids which both companies see “as only a stopgap to ultimately meeting tougher tailpipe-emissions requirements, particularly in China and Europe.” Toyota and Ford fall in the other camp; while still investing in all-electric vehicles, a large chunk of their resources are going to more hybrid cars in the U.S.
For example, Volkswagen is launching “a small plug-in SUV in the U.S. next year and an electric version of its minibus around 2022,” and GM has 20 fully electric vehicles hitting various markets in the next four years. As for Ford, we know a fully electric F-150 is coming eventually, but the only date set is for a hybrid version coming in 2020. Of course, Toyota captured the hybrid market with the Prius, so it’s no wonder they’re still investing in that cash cow.
So what are the arguments from the different companies? The articles cite David Filipe, Ford’s head of powertrain engineering, who said, “We can’t say to the customer ‘You have to take an all-electric vehicle.’” But isn’t that exactly what automakers have been saying for decades, except about gas-powered cars? No matter how much they pollute, and how many decades ago the industry knew about the extent of that pollution, most automakers have said to customers, you can only buy gas vehicles.
GM President Mark Reuss offered a more Zuckerbergian answer, “If I had a dollar more to invest, would I spend it on a hybrid? Or would I spend it on the answer that we all know is going to happen, and get there faster and better than anybody else?”
In other words, GM and Volkswagen are working under the assumption that getting there first is everything. But with plug-in electric vehicles currently making up only 1 percent of the U.S. market, it remains to be seen if demand will keep up with investment.
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