U.S. Auto Makers Step Up Plans for Electric Vehicles -- 2nd Update
October 02 2017 - 4:07PM
Dow Jones News
By Mike Colias
Detroit's largest auto makers ramped up plans for electric
vehicles in coming years, the latest push from traditional car
companies to respond to tougher emissions regulations and the
prospect that some markets across the globe could eventually ban
internal combustion engines powered with fossil fuels.
General Motors Co. plans to introduce two more electric vehicles
in the U.S. over the next 18 months and 20 globally within six
years, the nation's largest auto maker by sales said Monday. At the
same time, crosstown rival Ford Motor Co. said it had formed a new
team to help direct investments toward new electrified vehicles
expected in the next several years. The Detroit-based group, called
"Team Edison," will explore partnerships with suppliers and other
companies, the auto maker said.
The auto makers are investing billions of dollars in electric
vehicles despite challenges turning a profit on them due to
expensive technology costs that increase vehicle prices, and tepid
consumer demand. GM and Ford are currently minting profits in the
U.S. with fuel-thirsty pickup trucks and sport-utility vehicles
that consumers find enticing amid low gasoline prices.
Electric vehicles account for less than 1% of U.S. sales, and a
sliver of the nearly 90 million sold around the world.
Infrastructure challenges remain, with additional charging stations
needed to keep vehicles powered and avoid stranded motorists.
Investors have bid up shares of Tesla Inc., pressuring traditional
car companies, but the Silicon Valley electric-car maker
consistently loses money.
Still, countries including China, the U.K., France and India
have signaled plans to ban sales of vehicles powered with gasoline
or diesel fuels in the coming decades. The head of California's Air
Resources Board recently suggested the state could follow suit.
That is on top of burgeoning negotiations among California, Trump
administration officials and car executives over potentially
relaxing tough future emissions standards that require companies to
sell vehicles getting better mileage.
The upshot is car executives, even while highlighting challenges
with market demand and lobbying for regulatory changes, are
increasingly sounding bullish on electric cars and, in some
instances, echoing statements from government officials.
"General Motors believes the future is all-electric," said Mark
Reuss, GM's product-development chief, at the auto maker's suburban
Detroit design center. He said GM's future electric vehicles would
be profitable without further explanation.
GM's lineup will continue to offer hybrids and traditional
vehicles reliant on gasoline and diesel fuels during what the
company expects to be a prolonged transition to those predominantly
running on batteries, Mr. Reuss said.
GM said it would use the underpinnings of the Chevrolet Bolt
electric car currently on sale for coming vehicles in the U.S.,
though declined to discuss further details of their makeup. The
auto maker also said it has developed a next-generation battery
system that will allow for greater flexibility in electric-vehicle
sizes and body styles in coming years.
GM said it would do more to expand the availability of charging
stations to help spur consumer demand for electric vehicles, but
didn't peg an investment amount or disclose specific plans.
Volkswagen AG, stung by an emissions-cheating scandal, has begun
investing in charging stations around the U.S. and expects to offer
50 electric vehicles by 2025. Tesla already has thousands of
charging stations in its home country and elsewhere.
The market share of electric vehicles is expected rise in coming
years as more models hit the market that can travel further on a
single charge, boast better features, and, as the price of
batteries falls, lower prices. But analysts predict it will take
nearly a decade for the cost of electric vehicles to drop into the
same ballpark as gas-powered cars.
Auto makers have historically lost money on electric cars. Fiat
Chrysler Automobiles Chief Executive Sergio Marchionne once
publicly begged consumers not to buy one of the company's electric
vehicles, because the company lost $14,000 on each one.
China has been most aggressive in seeding an electric-car market
through regulations and financial incentives for auto makers and
consumers. In recent years, it has emerged as the top market
globally for electric vehicles and plug-in hybrids, mostly
low-price cars from Chinese brands.
GM said its next-generation battery platform would be offered in
two vehicle heights, which would allow it to build both cars and
larger vehicles, such as SUVs and vans. Most electric vehicles sold
today are small cars. GM officials showed reporters fully built
prototypes of three electric vehicles, including an SUV, a wagon
and a podlike micro bus.
GM also reiterated its commitment to fuel cells, an expensive
technology that produces electricity from hydrogen and oxygen.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
October 02, 2017 15:52 ET (19:52 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
General Motors (NYSE:GM)
Historical Stock Chart
From Aug 2024 to Sep 2024
General Motors (NYSE:GM)
Historical Stock Chart
From Sep 2023 to Sep 2024