Autos: Carmakers fight for lead in electric revolution
“It’s a scary time to be in the car business,” said Jack Ewing in The New York Times. New technologies have unraveled industry after industry. Now “carmakers, clearly, are next.” Regulators are forcing action on carbon dioxide emissions, while global sales are slipping as car ownership becomes “optional in the age of Uber.” According to one analysis, the major auto companies “will spend well over $400 billion during the next five years” retrofitting their factories to produce electric vehicles with more autonomous capabilities. “Investors have already signaled” they think Tesla will come out ahead in this transformation, despite a rocky 2019. The big automakers, though, are scrambling to “not be left behind as the winds change,” said Mark Wilson in FastCompany.com. Toyota announced last week that it will debut six new all-electric car models by 2025, five years earlier than planned. “GM plans to have 20 all-electric vehicles on the market by 2023, BMW will have 12 all-electrics on the market by 2025, and VW will literally cease all production of combustion vehicles by 2026 as it reinvents itself post–emissions scandals.”
“Most carmakers currently lose money selling electric cars,” said David Welch in Bloomberg.com. Tesla struggles to stay afloat, despite several profitable quarters—and the fact that many of its models sell for more than $100,000. Last week, though, General Motors promised that with EV technology that’s “engineered to be low-cost and make money,” its electric car business will be profitable without luxury-level prices. While the cost to build an electric car is falling, “the cost to add technology to conventional gas burners and make them meet regulations” is rising. “We’ll reach parity sooner than you think,” says GM president Mark Reuss. But there’s still one big obstacle to growth for all-electric vehicles in the U.S., said Jacqueline Toth in MorningConsult.com: “range anxiety.” From a recent survey, 62 percent of people said they would be less likely to consider an electric vehicle, because of “concern over the potential unavailability and distance to charging stations.” While California has more than 20,000 public charging outlets, New York, in second place, has just 3,300, and Texas 3,100.
Meanwhile, China has gone “all-in” on EV technology, said Bloomberg News. The country “now accounts for more than half of all passenger EV sales worldwide.” There are at least 20 “EV towns” dedicated to electric-vehicle research and manufacturing—even as overall auto sales fall. Most of these cities will fail, said one auto analyst, but one may well “one day morph into an electric Detroit.” So far, “China’s domestic carmakers have not engaged the export market,” said Jack Barkenbus in TheConversation.com, but you can bet they will. China’s government has chosen electric cars as one of 10 sectors central to a ‘Made in China’ push. “A key element of an electric vehicle’s price is the cost of its batteries,” and China makes most of the EV batteries in the world. Chinese companies are positioned to enter the U.S. by starting at the low end of the market, much as Volkswagen did 60 years ago. When the EV revolution comes, most likely it’s China that “will be at the forefront.”