Sunday Duel: Electric cars: A global vehicle rush
“General Motors believes in an all-electric future,” GM product boss Mark Reuss announced recently.
“Although that future won't happen overnight, GM is committed to driving increased acceptance of electric vehicles through no-compromise solutions that meet our customers' needs.”
GM already offers one extended-range electric vehicle (EV) — the Chevrolet Bolt EV — and it will add two more within 18 months; at least 20 will be in the company's lineup by 2023, Reuss said.
Thus did GM become the latest — but certainly not the only — car company to reveal a commitment to what is being called the “electrification” of the auto industry.
Some, like Sweden's Volvo, have said all their models will soon be either all-electric or hybrid. Germany's Mercedes-Benz will have electrified models of its vehicles by 2022. Volkswagen AG will invest $20 billion to develop electrified products.
In a nutshell, almost every company has some form of plug-in vehicle on its way to U.S. dealerships. While many are versions of gas-powered vehicles already in the marketplace, automakers are increasingly seeing the value of producing from-the-ground-up dedicated electric vehicles.
Importantly, Reuss, in a nod to stockholders, made it clear the electrification at GM must be profitable. An all-electric future, he said, only makes sense if the company can make money.
What has brought about this movement to electric vehicles? As with most major changes within the auto industry, it has been a convergence of factors.
Government regulations — not just in the U.S. but in many countries — are putting the squeeze on internal-combustion engines. Several countries plan to ban them entirely.
Many believe China, the largest auto market in the world, is crucial to EV growth. With the country's pollution and traffic congestion problems, China officials are expected to see that EVs are part of their potential solution.
Another key factor has been falling costs of batteries and related technology, which has made electric vehicles more competitive.
Obviously, any rise in oil prices will shift purchase decisions even further from internal-combustion engines to electric vehicles.
Today, even with more companies in the process of bringing electric cars to market, the future is challenging.
Less than 1 percent of total cars on U.S. roads are electric and “range anxiety” — the fear of running out of battery power — is a feeling most electric owners have experienced. A true infrastructure of public charging stations along key highways, in public parking garages and at shopping malls will be needed to convince motorists to buy electric cars.
Still, the people who forecast auto markets point to recent increases in EV sales and technology improvements as signs the future looks bright for EVs.
The auto business, of course, has always been difficult to predict. But with GM and other automakers firmly in the EV game, it would appear increasingly more motorists will be plugging in.
William H. Noack, a graduate of Michigan State University, is a business consultant who has advised some of the nation's leading industrial companies.