We’re all aware of the importance of electrification and the significant carbon reduction achieved by zero-emission electric vehicles. This is why so much emphasis is placed on EVs by decision makers responsible for the cars we drive now and those that will be available to us in the future. But it’s important to ask…are they leading us in the right direction?
Increasing evidence says this is not the case, so those decision makers influencing our driving future should know this: If charting the electrified road ahead is based on presumptions and unrealistic expectations, well… you’re playing with fire and likely headed for trouble. We’re seeing that trouble manifest now, in a big way, as the hot electric vehicle market is being consumed by uncertainty.
So, a bit of sage advice. If you’re playing with fire and you find yourself ablaze, the first rule of thumb is to stop, drop, and roll to smother the flames consuming you. In other words, do something proactive to avoid a profoundly bad ending. Yet, metaphorically, the auto industry has largely avoided this exercise in avoiding self-immolation.
A case in point. While going all-in with electrification seemed a strategic move to auto execs in Dearborn, Ford got burned in its electric vehicle shift…badly. After consistently reporting billions of dollars in quarterly losses in its EV operations, Ford is now making a strategic pivot away from its major EV efforts while taking a reported $19.5 billion write-off in the process. The automaker is also ending its groundbreaking F-150 Lightning electric pickup program after the specter of continuing low sales volume hit home, with little expectation this battery electric pickup will ever sell in numbers required to turn a profit.
This is not the only example of an inherently high-profile EV program flaming out due to financial realities. More than a decade ago, in my editorial Facing Up to the Electric Car Challenge, I pointed out a similar outcome for another trailblazing electric vehicle, GM’s circa-1990s EV1: “The EV1 was so costly to build with such massive losses there was no business case for it to continue, and so it ended, as all other electric vehicle programs of the 1990s ended, for the same reason.”
Of course, that didn’t mean the end of electric vehicles. Rather, automakers did some serious reengineering and strategic planning that has brought us the impressive array of all-electric vehicles now available to consumers, with more to come. But the rebirth that saw a new generation of EVs hasn’t changed many of the fundamental challenges the electric vehicle field has historically faced.
Batteries remain expensive and pure EVs are still costly by nature, which in many cases means they are unprofitable. Yet, the push for battery electric vehicles has continued unabated, supported by the belief that consumer demand will grow, production numbers will significantly increase, and in the interim substantial federal, state, and regional subsidies will continue to flow, supporting a wholesale transition from combustion vehicles to ones powered by batteries.
All these assumptions are now being challenged. Other automakers like GM and Volvo are also backing away from their move toward a future of exclusively producing electric vehicles, choosing instead to build diverse electrified and internal combustion models that buyers in large numbers desire and can afford.
To be fair, all this isn’t entirely the auto industry’s fault. Legislators and environmental interests have aggressively pushed a battery electric vehicle agenda for years while ignoring some pretty obvious uncertainties. Inexplicably, they have done so without considering a bigger picture that embraces an array of other rational approaches and technologies that will contribute to the electric vehicle’s ultimate success.
Choosing how to respond to regulations and legislative agendas is an inherently crucial element in a company’s vision and future strategy. The most high-profile failure here has been the decision to go all-in on the electric agenda even in the face of obvious and major uncertainties, not the least of which is any real proof of sustained consumer demand for battery electric vehicles at prices higher than those of conventionally powered models. There is now a growing realization that consumers may well want something different than what legislators, regulators, and automakers have planned.
Generally, the vast number of car buyers want nothing more than to drive comfortable, safe, and efficient vehicles that fit their needs and those of their families at an affordable price. Sure, there are those who will pay a premium to drive pricier or more exclusive vehicles that speak to their sensibilities, image, or sense of self. But most car buyers must balance features and benefits with financial realities, and vehicle cost and monthly payments are almost always an important factor in a new vehicle purchase.
In the absence of significant federal subsidies – which is the case now – electric vehicle acquisition costs are higher and that has clearly changed the dynamics in this market.
With that realization, we’re now seeing a renewed consumer and automaker interest in other more affordable electrified models including hybrids and plug-in hybrids. Hybrids have a proven track record over the past 25 years so greater adoption is a given. Plug-in hybrid electric vehicles (PHEVs) have long represented the next step on the way to a fully electric vehicle and there will be many more of these coming to new car showrooms.
Then there’s a new twist in the form of extended range electric vehicles (EREVs), essentially more affordable EVs that use smaller battery packs paired with an onboard engine-generator. Reducing battery capacity can significantly lower costs without sacrificing driving range, since the engine-generator produces electricity to recharge the battery and power the vehicle’s drive motors. Automakers see EREVs as a winning strategy and are investing heavily to bring these models into their product lineups.
Of course, there will be many who disagree with any strategy that includes diverse forms of electrification rather than exclusively prioritizing battery electric vehicles. To those who cry “foul,” it’s worth reflecting on what others with a broad view of our transportation future have to say.
Toyota executive vice-president Yoichi Miyazaki frames the carbon challenge this way: “Carbon knows no borders and CO2 reduction is an issue that cannot wait,” adding that “we need to immediately start with what we can do.” In his view, spreading the use of electrified vehicles as quickly as possible and in significant numbers is the imperative, while being “very attentive to the needs of our customers.”
Essentially, that means getting significant numbers of electrified vehicles of all types into the hands of drivers worldwide, in a form that fits their needs. The answer might be a battery electric vehicle in some areas like California with a sizeable public charging network. But for others living in wide-open spaces with a scarcity of public chargers, a better fit might be a hybrid or plug-in hybrid.
Transportation is a huge contributor to carbon emissions and significant change is needed. That said, far too much emphasis has been placed on battery electric vehicles as an urgent and exclusive solution, prompting legislation and regulations with improbable timelines and outcomes.
This needs to be said: In the real world, it’s unrealistic that a wholesale switch to battery electric vehicles would accomplish needed carbon reduction goals on its own, or in a reasonable time frame. Consider that there are some 290 million light-duty vehicles now on our nation’s highways, and they tend to remain on the road about 12 years before being retired. Even if all new car sales were exclusively battery electric vehicles today, it would likely require 25 to 35 years to achieve an entirely battery-powered fleet.
There’s a lot to accomplish with electrification, increased efficiencies, downsizing, and vehicle lightweighting, plus the development of low-carbon, drop-in synthetic fuels for the millions of internal combustion vehicles already on our highways. A more realistic and diverse strategy like this is what’s needed. Imposing unattainable goals with questionable outcomes that force consumers to buy cars they may not want, and nudge automakers toward unnecessary risk, is simply not the answer.