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G.M. and Ford Lay Out Plans to Expand Electric Models G.M. and Ford Lay Out Plans to Expand Electric Models
(about 3 hours later)
DETROIT — In a push to produce cars powered by batteries or fuel cells, General Motors on Monday laid out a strategy to vastly expand the number of electric models in the marketplace. DETROIT — China has said it will eventually ban gasoline-powered cars. California may be moving in the same direction. That pressure has set off a scramble by the world’s car companies to embrace electric vehicles.
G.M. said it would introduce two new all-electric models within 18 months as part of a broader plan toward what the company says is its ultimate goal of an emissions-free fleet. The two models will be the first of at least 20 new all-electric vehicles that G.M. plans to bring out by 2023. On Monday, General Motors, America’s largest automaker, staked its claim to leadership. Outlining a fundamental shift in its vision of the industry, it announced plans for 20 new all-electric models by 2023, including two within the next 18 months.
The announcement came a day before a long-scheduled investor presentation by Ford Motor that was also expected to emphasize electric models. After the G.M. news emerged, Ford let loose its own plan, saying it would add 13 electrified models in the next several years. G.M.’s announcement came a day before a long-scheduled investor presentation by Ford Motor that was also expected to emphasize electric models. After the G.M. news emerged, Ford let loose with its own announcement, saying it would add 13 electrified models over the next several years, with a five-year investment of $4.5 billion.
With governments from China to California considering stiff future regulations to encourage the production of emissions-free vehicles, other major automakers are also stepping up efforts to broaden their electric offerings. The German automaker Volkswagen has pledged to introduce a number of new battery-powered models in the next few years. And the electric car maker Tesla is ramping up production of its new Model 3 sedan, which has generated huge interest in the form of $1,000 deposits from hundreds of thousands of potential buyers. “General Motors believes in an all-electric future,” said Mark L. Reuss, G.M.’s global product chief. “Although that future won’t happen overnight, G.M. is committed to driving increased usage and acceptance of electric vehicles.”
G.M.’s chief executive, Mary T. Barra, announced in September that the company, America’s largest automaker, expected the industry to move aggressively toward an automotive future with zero emissions, traffic accidents and highway congestion. In the first eight months of 2017, even with federal tax incentives, Americans purchased only about 60,000 battery-powered electric vehicles, and about the same number of plug-in hybrid models, according to Hybridcars.com. That amounts to 1 percent of the market.
The company has set no time frame for an all-electric portfolio of products, and expects to continue making cars and trucks powered by gasoline engines for an indefinite period of time. But the upstart automaker Tesla has proved the potential of electric vehicles to generate excitement, with its first mass-market offering, the Model 3 sedan, attracting $1,000 deposits from hundreds of thousands of potential buyers. (It is also showing the challenges of getting the technology to scale, announcing on Monday that it produced only 260 Model 3s in the third quarter, “less than anticipated due to production bottlenecks.”)
Mark Reuss, the company’s chief of global product development, said Monday that G.M. would introduce two new all-electric vehicles derived from its current battery-powered Chevrolet Bolt sedan. More than consumer demand, however, it is regulatory pressure that is revving up the electric push, with officials in China, Europe and the United States ratcheting up emissions standards and setting or discussing deadlines that could eliminate gasoline-powered cars within a generation.
“General Motors believes in an all-electric future,” Mr. Reuss said at a media event at the company’s technical center in the Detroit suburb of Warren. “Although that future won’t happen overnight, G.M. is committed to driving increased usage and acceptance of electric vehicles.” The announcements by G.M. and Ford follow pledges by the German automakers Volkswagen and Daimler to build hundreds of thousands of electric vehicles in the coming years, and the decision by Volvo, the Chinese-owned Swedish luxury brand, to convert its entire lineup to either electric cars or hybrid vehicles that are powered by both batteries and gas.
He declined to specify what type of new models will be built off the Bolt’s underpinnings, but the chief of G.M.’s electrification strategy, Pam Fletcher, said the company is focusing on the development of sport utility vehicles and car-based crossover models. The accelerated pace of development also reflects the symbiotic relationship between battery-powered cars and another technological frontier; auto companies are tying their electric-car plans to lofty goals of building fleets of autonomous vehicles for ride-hailing services.
Ms. Fletcher said the Bolt, a compact hatchback that was introduced late last year and is now on sale nationwide, has helped G.M. “see what is possible” in a future lineup of all-electric models. The automakers believe they can solve the problem of achieving — as G.M.’s chief executive, Mary T. Barra, has begun stressing — a world with “zero crashes, zero emissions, and zero congestion.”
For its part, Ford said it intended to accelerate development of electric cars as part of a broader business strategy that will be laid out on Tuesday by its new chief executive, Jim Hackett. It is a stunning statement from a company that, together with Ford, sells more large pickup trucks and full-size sport utility vehicles than the rest of the global industry combined — and from an industry that grudgingly got into building electric vehicles in the face of stricter fuel emissions standards.
Ford already fields several slow-selling hybrid, battery-powered and plug-in models, and has said it would spend $4.5 billion over the next five years to add to its offerings. It also plans to add hybrid versions of big sport-utility vehicles, like the Ford Explorer. Just last month, during a visit to China, Ms. Barra cautioned against mandates in which the transition to electric vehicles outpaces consumer demand. “I think it works best when, instead of mandating, customers are choosing the technology that meets their needs,” she said.
Now the company has formed a group it calls Team Edison to focus on pure battery-electric cars, said Sherif Marakby, Ford’s vice president for autonomous vehicles and electrification. On Monday, Mr. Reuss framed the company’s strategy as a natural outgrowth of what it had learned from its existing entry in the all-electric arena, the Chevrolet Bolt, even though it has achieved only negligible sales so far.
By 2020, Ford plans to produce an electric car that can go 300 miles before needing a recharge, Mr. Marakby said. “That’s a big change,” he said, compared with the early electric models that could go fewer than 100 miles, making them impractical for many consumers. “There is a transition going on,” said Mr. Reuss, adding that G.M. has no timetable to eliminate gasoline engines from its vehicles. He said that by the 2023 target date for the new electric models, G.M. will still be building cars, trucks and sport-utility vehicles with internal combustion engines.
Mr. Reuss of G.M. said that achieving a zero-emissions future would require more than battery technology, and stressed that his company was also moving forward with hydrogen fuel-cell equipment that can generate electric power. “They wisely gave no time frame because, frankly, no one knows how the future will evolve,” said Michelle Krebs, an analyst with the research firm Autotrader.
“There is a transition going on,” said Mr. Reuss, adding that G.M. has no set timetable to eliminate gasoline engines from its vehicles. He said that by the 2023 target date for the new electric models, G.M. will still be building cars, trucks and sport utility vehicles with internal combustion engines. For its part, Ford said it intended to accelerate its development of electric cars as part of a broader business strategy that will be laid out for Wall Street on Tuesday by its new chief executive, Jim Hackett. Mr. Hackett was installed in May after his predecessor, Mark Fields, failed to persuade investors and his board that the company was moving fast enough to develop the vehicles of the future, like battery-powered and self-driving cars.
G.M. stock opened sharply higher — after the company’s event had been scheduled but before its announcement had been made — and was up almost 4 percent in afternoon trading. Ford already fields several slow-selling hybrid, battery-powered and plug-in models, and has said it also plans to add hybrid versions of its big sports-utility vehicles, like the Ford Explorer, as it expands its electric offerings.
Mr. Reuss said the company was not expecting job losses based on a shift away from gasoline engines, which currently account for a vast majority of the company’s production. And he said G.M. did not expect to be hurt financially by a move toward electric models, which can carry higher price tags than comparably sized gasoline-powered vehicles. The company has formed a group it calls Team Edison to focus on pure battery-electric cars, said Sherif Marakby, Ford’s vice president for autonomous vehicles and electrification.
By 2020, Ford plans to produce an electric car that can go 300 miles before needing to recharge, Mr. Marakby said. “That’s a big change,” he said, compared to the early electric models that could go fewer than 100 miles, a limitation that made them impractical for many consumers.
However the tastes and demand for electric vehicles evolve domestically, China may have the biggest influence in shaping the marketplace. Sales of electric vehicles, or E.V.s, are already in the hundreds of thousands there and could exceed 400,000 by 2019, representing two-fifths of the world market, according to LMC Automotive, a global consulting company.
“China is a huge part of the story in E.V.s, and it is a big factor in the decision making of the automakers,” said Mike Ramsey, an analyst at Gartner Inc. who tracks auto-industry technology. “China’s move toward higher emissions standards and the E.V. mandates gives the big global automakers certainty that they are going to have a significant market for these cars and they can know these investments will be worth it.”
Reflecting the importance of the Chinese market, Ms. Barra, the G.M. chief, visited Shanghai last month as the company announced that it would roll out at least 10 all-electric or hybrid models in China between 2016 and 2020, including those already in the market.
Just a few days earlier, China had joined other countries, including Britain and France, in announcing plans for an eventual ban on sales of gasoline- and diesel-powered cars. But unlike those countries, which said that they hope to halt sales in 2040, China set no date.
The chief auto-emissions regulator in California — whose agency largely sets the standards to which automakers design their American fleets — said last week that Gov. Jerry Brown was asking why his state shouldn’t follow suit.
“I’ve gotten messages from the governor asking, ‘Why haven’t we done something already?’” the regulator, Mary D. Nichols, chairwoman of the California Air Resources Board, told Bloomberg News. “The governor has certainly indicated an interest in why China can do this and not California.”
At the same time, however, the Trump administration is pushing in the opposite direction, conducting a review of tight fuel-emissions standards for 2025 set by the Obama administration; it is widely expected to scale them back.
Investors reacted positively to G.M.’s announcement, with its shares tacking on more than 4 percent in Monday’s trading. And Mr. Reuss said G.M. did not expect to be hurt financially by a shift toward electric models, which at least for now can cost more to produce than comparably sized gasoline-powered vehicles.
“The future will be profitable,” he said.“The future will be profitable,” he said.