By on August 2, 2017

2016 Mazda MX-5 Miata cutaway - Image: MazdaIf you were among America’s 1.4 million new vehicle buyers in July 2017, there’s a 99-percent chance your new vehicle requires fuel. Although the vehicles that run off the electric grid are linked to $7,500 government tax credits, they form barely more than half of one percent of the U.S. new vehicle market.

Mazda, you’ll recall, doesn’t sell any electric vehicles in the United States. Mazda doesn’t sell any vehicles with a plug. Mazda doesn’t even sell any hybrids.

So it’s not surprising that Robert Davis, former Mazda USA senior vice president of operations who’s now in charge of special assignments, candidly laid out the case for the internal combustion engine yesterday at the CAR Management Briefing seminars in Traverse City, Michigan.

“The internal combustion engine has a strong future role in transportation,” Robert Davis says.

Automotive News reports that Davis believes the “impending death of the internal combustion engine is overrated.”

“Let the government keep the $7,500,” Davis says, speaking of the EV tax credit, “and let the industry find the best way to meet the clean air standard. Make it CO2, make it grams per mile, fuel economy — whatever feels best. But don’t mandate the particular powertrain.”Mazda CX9 Skyactiv Turbo engine - Image: MazdaNaturally, Mazda is deeply invested in the way regulatory environments approach the conventional internal combustion engine. As a small automaker hoping to earn a modest 2 percent share of the U.S. vehicle market — Mazda’s at 1.7 percent in 2017’s first-half — Mazda doesn’t have the wherewithal to quickly launch a dedicated EV or engineer a plug-in hybrid from the ground up.

Nor does Mazda seem terribly interested in doing so, anyway. “Making a couple of superefficient models,” Davis says in reference to vehicles such as the Fiat 500e, “to offset others really doesn’t make sense to us at Mazda.”

“We just don’t build cars that way.”

Davis says, “We certainly considered the adoption of new technologies, batteries, EVs, plug-in hybrids and everything else.” But with ICE at the foundation, “before we go into the time and effort and expense of adding electrification, we were convinced that a solid, efficient internal combustion engine was critical.”

Hence, Skyactiv branding is all up on e’erything.

Mazda’s Kenichiro Saruwatari said last month that the internal combustion engine was going to be a part of Mazda’s portfolio beyond 2050. Depending on your perspective, Mazda is either planting its head in the sand, swimming against the tide, or simply realistic about the size of the wave.

Mazda’s engine formula is set to change later this year with the arrival of a high-torque four-cylinder diesel in the 2018 CX-5. Hopefully news of its impending arrival is not overrated, as well.

[Image: Mazda]

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.

Get the latest TTAC e-Newsletter!

Recommended

58 Comments on “Mazda: “Impending Death of the Internal Combustion Is Overrated”...”


  • avatar
    volvo

    “If you were among America’s 1.4 million new vehicle buyers in July 2017, there’s a 99-percent chance your new vehicle requires fuel.”

    That should actually read there is a 100% chance your new vehicle requires fuel.
    1% do not carry fuel but burn it at a remote location (hopefully NIMBY).

    • 0 avatar
      dwford

      Burning the nasty CO2 producing fuels at remote locations makes it so it doesn’t;t exist. Thats why we produce all our consumer goods in China, so we can claim we love the environment whitley being ignorant of how the stuff is made (hint: it’s made the same yucky way we used to make things here in the 50’s).

      • 0 avatar
        stingray65

        But I was recently told by TTAC commenters that solar and wind power were now so darn cheap that it would soon not even be worthwhile to meter electricity use. That no doubt means your EV will soon be running totally on hot air.

        • 0 avatar
          FreedMike

          There’s no shortage of hot air when it comes to energy discussions.

          Remember “clean coal”? Good for a laugh or two, for sure.

          The future is going to involve a LOT more renewable energy. Why? Because fossil fuels pollute way too much, and if countries like China or India use them the way we did when we were industrializing, there will be an immense range of environmental issues that have nothing to do with global warming.

          • 0 avatar
            stingray65

            I certainly remember clean coal, which was projected to increase coal use by about 30% because of the added energy requirements to supposedly permanently sequester the C02.

          • 0 avatar
            accord1999

            China’s already the #1 user of energy in the world and #2 user of oil, and its coal usage has already surpassed US in per capita. India has recently passed the US to become the #2 coal user and Japan to be the #3 oil user. You don’t have to worry about China and India using fossil fuels for industrialization because they’re already there.

            And the future will involve even more fossil fuel consumption.

          • 0 avatar
            thelaine

            The real energy technology revolution has been in petroleum extraction, not solar, wind or batteries. Poor countries cannot afford energy fantasies. They get wealthy the old fashioned way; they burn it.

          • 0 avatar
            thelaine

            “Over all, 1,600 coal plants are planned or under construction in 62 countries, according to Urgewald’s tally, which uses data from the Global Coal Plant Tracker portal. The new plants would expand the world’s coal-fired power capacity by 43 percent.”

            http://www.nytimes.com/2017/07/01/climate/china-energy-companies-coal-plants-climate-change.html

          • 0 avatar
            thelaine

            Remember “peak oil?” The world will be running on hydrocarbons when your grandchildren are in nursing homes.

          • 0 avatar
            FreedMike

            “And the future will involve even more fossil fuel consumption.”

            Correct, but:

            1) We know fossil fuels aren’t inexhaustible.
            2) We know fossil fuels cause an entire range of pollution effects that have zero to do with global warming.
            3) Having three billion people in India and China overdependent on fossil fuels just magnifies the effects of 1) and 2).

            Therefore, a long term solution to the world’s energy needs is needed, even if fossil fuel consumption is on the rise.

            Or do we just build the world’s economy on a house of cards?

        • 0 avatar
          brandloyalty

          @stingray65
          “But I was recently told by TTAC commenters that solar and wind power were now so darn cheap that it would soon not even be worthwhile to meter electricity use. That no doubt means your EV will soon be running totally on hot air.”

          Link?

      • 0 avatar
        Speed3

        The reality is that US electricity generation is rapidly moving to natural gas and to a lesser degree renewables, so it is cleaner than before.

        Even if there were no net decrease in CO2 emissions, its still better to have the pollution away from where people live and work.

  • avatar
    Chocolatedeath

    Let the hate begin…

  • avatar
    thornmark

    Thomas A. Edison disagrees:

    “Gasoline engines will soon be rendered obsolete.”
    – 1910

    But at least the Washington Post nails it as usual:

    “Prices on electric cars will continue to drop until they’re within reach of the average family.”
    – 1915

  • avatar
    thegamper

    I think Mazda’s statement is a bit self serving unfortunately. Coming from the company that does not have the resources to develop its own electrified vehicles. They will probably coast along fairly well over the next decade anyway but as more vehicles that have 300+ mile range come on line that can support some sort of rapid charging AND have reasonable price tags AND industry typical reliability, I think people will abandon gasoline in droves. Even the oil companies agree, I think Shell recently moved up its peak oil consumption again. Just look how far we have come in the last decade.

    Im sure that the next decade will bring sub $30k (in today’s dollars) models that can approach 400 mile range. Electric vehicles will hit a critical mass, say 10% of market where sufficient infrastructure will be in place for cross country trips, chargers will be abundant and even present in more rural areas. A sufficient number of reasonably priced and reliable models will be on sale…and things will snowball.

    I hope Mazda continues to live on, but they need electrification/hybrid…something on their most mainstream models, at least as an option.

    • 0 avatar
      mason

      “Im sure that the next decade will bring sub $30k (in today’s dollars) models that can approach 400 mile range”

      Is that before or after the $7500 bonus? Its gonna take a lot longer than a decade for electrification to stand on it’s own legs and be competitive with ICE. Alot longer.

      • 0 avatar
        FreedMike

        Eventually, yes, this market will become viable without the tax credit.

        But for now, it is what it is.

      • 0 avatar
        stingray65

        The problem with “temporary” subsidies is that they are never temporary.

        “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!” – Ronald Reagan

        • 0 avatar
          FreedMike

          Actually, many subsidies have been temporary.

          The one that comes to mind first was the tax credit they used to give out to early adopters of PC tech, back in the early ’80s.

          Last I checked, no one gets that one anymore.

          And speaking of Reagan and the size and cost of the big bad gummint…

          Federal spending 1981: $678 billion
          Federal spending 1989: $1.143 trillion

          https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/hist01z1.xls

          • 0 avatar
            stingray65

            Reagan was too nice and didn’t have the majorities to get the spending cuts he wanted. He was able to get indexed tax cuts and tax code simplification, however, which is where the PC subsidy was eliminated if I remember correctly.

          • 0 avatar
            FreedMike

            Funny how when people point out faults in the record of (insert politician’s name here), an entire range of excuses ensues.

            But I’ve never heard “Reagan exploded federal spending because he’s a nice guy” before. That’s a new one. You mean to tell me that the man who supposedly singlehandedly brought the USSR to its’ quivering knees was too wimpy to use a veto pen?

            Of course he was. Right.

            (In truth, Reagan expanded the economy the same way every president who inherits an economic mess does: overspending. It works. But let’s be real about it.)

      • 0 avatar
        Luke42

        The $7500 tax break goes away for a car company after it sells something like 200k electric vehicles.

        Tesla will use up its allocation of $7500 tax breaks very soon, assuming that Tesla can deliver half of the production they’re talking about.

        The Model 3 reservation holders are all trying to guess if we’ll get the tax break — or if it will have expired by the time our cars are built.

        As for my wife and I, it probably won’t affect whether we buy the car — but it will affect how much we spend on options.

        This is far less of an issue for non-Tesla car companies which sell EVs.

  • avatar
    thornmark

    >>Even the oil companies agree, I think Shell recently moved up its peak oil consumption again. Just look how far we have come in the last decade.<<

    If I were a cynic I would note that oil companies love to lowball oil reserves too – nothing suits their interests more.

    That's not to say that some day electric may be viable w/o subsidy but Tesla’s current valuation is pure tulip bulb territory.

  • avatar
    28-Cars-Later

    “Let the government keep the $7,500,” Davis says, speaking of the EV tax credit, “and let the industry find the best way to meet the clean air standard. Make it CO2, make it grams per mile, fuel economy — whatever feels best. But don’t mandate the particular powertrain.”

    I completely agree with him, but the reality is it simply depends on which statists are in control at any given time. They do not care for your business or customers, they only care about their own power and to a lesser extent their social strata. If Nero decrees, we will eliminate ICE by 2030, and is still in power by say 2025, you won’t have a choice. Defying them cost VAG multiple billions and it would bury a niche player like Mazda. All your free market are belong to them.

    Mazda’s best move is to buy come Congressional swamp creatures so they can be exempted from the stupid, or something. I expect them to be BOGO by the end of the year, Mazda. Zoom Zoom.

    • 0 avatar
      dwford

      As an Uber driver, I’d seriously consider a Bolt, but since I already write off nearly all my income, the $7500 tax credit is actually useless to me, making the car too expensive for me. How about switching that up to a rebate instead, like the states do?

      • 0 avatar
        stingray65

        Because a EV tax credit is a tax expenditure, which means the government has no “out of pocket” spending for the subsidy, they simply let you keep your own money (instead of paying income taxes) if you agree to buy the “correct” type of vehicle. By contrast, a EV rebate is an “out of pocket” expense for the state, which means they have to get tax revenue from me so they can give you a cheaper Bolt. In reality it doesn’t make much difference, but from a budgeting and deficit accounting perspective the tax credit looks better.

    • 0 avatar
      FreedMike

      “Defying them cost VAG multiple billions…”
      LOL, they didn’t defy the government. That’d be like the idiots who move onto Whack Job Ranch in Montana and tell the revenueers to come at me, bro.

      VW just cheated. If they hadn’t, it wouldn’t have cost them. Simple as that.

      • 0 avatar
        28-Cars-Later

        Some things are not black and white. The rules were set up to destroy them.

        Quis custodiet ipsos custodes?

        • 0 avatar
          FreedMike

          Are we talking about the same rules that every other manufacturer that sells diesels has to follow, or did I miss C-Span on the day they passed the “Omnibus F**k Volkswagen And Only Volkswagen” bill?

          • 0 avatar
            28-Cars-Later

            Correct. If you look at Euro5 to Euro6, the emissions were reduced something about 66% whereas gasoline was 20% in the same 5 to 6 standard. I couldn’t find a good source on US standards but do know they are stricter. They don’t want cheap diesel, period.

            Cui bono?

          • 0 avatar
            FreedMike

            Well…I’m talking about our country, not Europe.

            But if we are talking about Europe, did they apply the same standards to all manufacturers, or just to VW? That question answers itself.

            Now, if we want to talk about whether emissions standards are fair or unfair, that’s a different conversation. It’s one worth having. But saying VW got singled out isn’t borne out by the facts. It knew the rules, and the rules were the same for everyone. They just chose to cheat instead. The rest is history.

  • avatar
    stingray65

    I’ve seen no evidence that any electrified vehicle is making a profit for its manufacturer, but plenty of evidence that most are losing hundreds to thousands of dollars per unit. Big players like VW or GM, or a premium brand like BMW can develop some electrified models for PR or CAFE purposes even if they are certain money losers because they also sell lots of profitable “regular” models, but a small “mass-market” brand like Mazda just can’t afford to play that game. Since pure EVs are relatively simple vehicles, if battery costs and capacity do eventually become competitive with gasoline I expect Mazda can develop or buy the needed technology to launch their own EVs.

    • 0 avatar
      thelaine

      This. The economics have not changed and consumer preferences are going in the opposite direction as they always do when oil is plentiful and gas is cheap. Electric cars are a curiosity and a regulatory artifact. They get lots of attention, but not many buyers. There is a drumbeat, but not many are marching. Electric cars are the future, and they always have been. Similar facts control the “alternate” energy sector. Shangri La is just around the next corner… and the next…

    • 0 avatar
      FreedMike

      Electric cars won’t become more popular due to regulations, or tax credits, or anything else that folks of a certain political bent like to talk about.

      They’ll become more popular because people will love being able to fuel up in their garages every night, and because they’re going to be cheaper to run. They’ll be a better mousetrap for a lot of folks. Better mousetraps sell. And the companies that sell them best will make a boatload of money doing it. Capitalism 101.

      The only reason for the tax subsidies is to stimulate demand for them so that companies can amortize their development costs of a new technology. That’s all. And it’s nothing new. The government did it with an entire range of consumer products, including the one I’m using to type this right now.

  • avatar
    VW4motion

    Should say. Impending death of Mazda, period.

  • avatar
    TMA1

    I think we could make a drinking game out of every time someone brings up a forth coming Mazda diesel. It’s a bigger deal than the rotary engine, and just as likely to reach the US.

    To paraphrase thelaine, “Mazda diesels are the future, and they always will be.”

  • avatar
    indi500fan

    Mazda is a small nimble outfit, they were able to make the switch from rotary to piston, and seem to have a good handle on veh dynamics.
    They should assign a small portion of talent to kill their corrosion problem (if it still exists), that seems to dog them up North.

    • 0 avatar
      LeMansteve

      Mazda can make a well-sorted car but they never “switched” from piston to rotary. They created a handful of niche models that used only a rotary engine. Piston engines have always powered the vast majority of their models.

      I seriously doubt Mazda’s history with corrosion issues is due to lack of technical knowledge.

      • 0 avatar
        smokingclutch

        False. Mazda was moving their entire lineup to the rotary engine in the early-70s, until the gas crisis hit. The RX-2, RX-3, RX-4, and REPU were all intended as mainstream cars.

  • avatar
    SPPPP

    I think Mazda is making the right play, but they have to be very vigilant right now to avoid being left in the dust technologically.

    Mazda needs to improve its position in gas vehicles while also getting ready to survive as a maker of electric cars.

    Mazda has to be realistic about their market position. They can’t risk billions developing unproven technology, especially when larger firms are already doing it. There’s a very good reason that Toyota and GM have been pioneers in bringing hybrid and electric vehicles to market. They are two of the largest firms in existence and they have billions to spend, and thousands of engineers to deploy as they wish.

    I think Mazda’s best case scenario is not to work on anything ground-breaking in mass-market electrification, but to work on integrating electrification with the attributes that make Mazdas unique. They will most likely be licensing electric technology in the short to mid term, and partnership with one or more larger automakers will be key in that process.

    Like, for example, Mazda should have engineers crawling over Chevy Bolts, Tesla Model 3s, Toyota Priuses, and developing technology studies and business cases. Perhaps taking those cars and trying to Mazda-ize them. Sort of like Lotus does chassis development work for larger automakers. But Mazda needs to know how to make a Mazda Bolt that feels like a Mazda and is sold as a Mazda, or the company may not survive long.

    • 0 avatar
      brandloyalty

      Mazda had no problem selling (a few) Tribute Hybrids, their version of the Escape Hybrid. Which itself was based on a Mazda platform.

      • 0 avatar
        bhtooefr

        There’s also the Axela Hybrid in Japan, which is the Gen 3 Prius transaxle and inverter assembly mated to a detuned version of the 2.0 SkyActiv-G.

        One problem, however, with the outsourced hybrid strategy is that packaging isn’t considered, and you get the packaging compromises common in late 2000s/early 2010s hybrids.

        • 0 avatar
          scott25

          The Axela hybrid is AWD, with the electric motor powering the rear wheels. I seem to remember TTAC posting an article about “ICE powering the front wheels, electric motor powering the rear” being the future but it still doesn’t seem to have taken hold even though it makes so much sense for crossovers.

  • avatar
    FreedMike

    The interesting thing is, given the fact that Mazda is really, really good at lightweight construction techniques, it’d seem to be a natural for electrified vehicles.

    Tells me they don’t have the resources to play in that sandbox.

    • 0 avatar
      SPPPP

      Exactly. They will wait for the tech to become semi-commoditized, then install it. But I think they need to work on figuring out the integration now.

    • 0 avatar
      Ryoku75

      An electric Miata would be kinda cool, imagine all that instant torque too.

    • 0 avatar
      stingray65

      I’m sure Mazda could make an EV, but why spend money developing a money loser? Sure one day EVs might be profitable, but until then they are going to cost Mazda money that would almost certainly be more profitably spent developing more Skyactiv cross-overs.

      • 0 avatar
        mcs

        They’re profitable now for some companies. The Leaf has been profitable since 2014. Telsa’s gross margins are better than legacy companies. You’re right about Mazda though, I don’t think they could afford to develop an EV.

        http://marketrealist.com/2017/05/key-takeaways-from-teslas-1q17-earnings-event/

        • 0 avatar
          stingray65

          MCS – The Leaf and Tesla are only “profitable” because they are covering the variable manufacturing costs, but they are not covering fixed overhead costs or product development costs. Any company that doesn’t cover its fixed costs over the medium-long term is going to go bankrupt, and any product that doesn’t recover its development costs will not be able to afford an update unless it is subsidized by something else.

          • 0 avatar
            mcs

            @stingray: Nissan is in a different situation than Tesla. Leaf’s are built in existing plants alongside ICE vehicles. At the end of 2016, the Renault-Nissan alliance had sold 424,797 EVs.

            The Leaf’s technology isn’t used in just one vehicle. In addition to the Leaf, there is the e-NV200, the Renault Master ZE, the Kangoo ZE, and the Renault ZOE.

            Nissan knows all too well how to build cars at a low cost (My son’s iA interior looks like an S Class next to the Leaf), so you can bet they are making money on the Leaf now.

            Also, EV technology isn’t exclusive to the auto industry. Development costs for battery technology are shared by the mobile device industry, robotics, and power tools.

          • 0 avatar
            bhtooefr

            MCS: Renault developed their EV technology independently, although the next-generation Zoe will be shared with the Leaf.

  • avatar
    Jerome10

    In late, but I have to agree with Mazda here, unless mandated by government forces, electrics have forever to go and are nowhere around the corner in any sort of massive market share kinda way.

    I actually just saw an analysis done on “fueling” an electric at home in San Diego using electrical consumption of the (I think Leaf), and the cost of tiered electrical rates currently in place in San Diego.

    It came to basically something like $6+ dollars in electricity for the same distance that a gas car can go for something like $2.50.

    When you’re looking at 2-3x the cost for electrics in “fuel” alone, not to mention the added up-front expense (on some models), general smaller size, the government handouts, slow refueling, potential battery issues longer term etc etc, no rational person will ever choose an electric.

    Granted people don’t act rationally all the time (minivans vs 3 row SUVs etc), but to see any sort of significant market penetration electrics have a boatload of hurdles to overcome. Most people will look at those downsides and pass. There won’t be enough electric enthusiasts, or Tesla enthusiasts to make a dent anywhere.

    Mazda is being completely rational here.

    • 0 avatar
      mcs

      Your numbers are garbage. San Diego’s electric costs are .23 per kilowatt hour. That’s 26 kWh for $6.00. A Leaf getting 4 miles/kWh could travel 104.34 miles. I usually get around 4.6 to 4.8 this time of year and that’s 120 to 125 miles. Gas is around $2.40 a gallon in SD, so we’re talking about an ICE car having to get close to 100 to 120 miles per gallon to go as far as an electric for $2.50.

      My costs at home are .14 per kWh, but I get free charging at the office so my costs are effectively .07 per kWh. I can go 411 miles on $6. Any ICE cars doing that yet?

      Maybe you should actually drive one before you start calling us irrational. People buy electrics for reasons other than the environment or to save money anyway.

      • 0 avatar
        mcs

        Another look at the numbers would put a 4.0 m/kWh Leaf going about 43 miles on $2.50 and 4.8 m/kWh about 52 miles. Try that in an ICE in heavy San Diego stop and go traffic.

        • 0 avatar
          SPPPP

          mcs, it’s nice that your work is giving you electricity for free, but that doesn’t apply to everyone. And if everyone starts driving electrics to work, all these nice free giveaways will probably dry up real fast. When electric usage more than doubles at any given office, employees will start getting billed to use these charging stations.

          Also, I checked the utility rates in San Diego, and I think you missed a key point. According to the SDGE rate sheet, the Tier I summer electric rate is $0.21 per kWh. But if you use “more than 130% of baseline”, the excess is billed at $0.43 per kWh. It sounds to me like there is a good chance that buying a major power consumer like an electric commuter car might drive a family’s usage into Tier II.

          If all the power that goes into the car is billed at Tier II rates, then you only get 14 kWh for $6.00. The Leaf you mentioned, getting 4 miles/kWh, would then only go 56 miles on $6.00. Or, for $2.50, you could get 5.8 kWh, which would get you 23 miles of range.

          Now it’s possible that I am missing something too. But if I am reading this right, suddenly it seems that the referenced study may not be total garbage. You see what I mean?

          • 0 avatar
            mcs

            @SPPPP: “And if everyone starts driving electrics to work, all these nice free giveaways will probably dry up real fast.”

            With newer generation EVs, at work charging won’t be needed anyway. My one hundred mile round trip won’t require at-work charging – even at sub-zero temperatures.

            Since you’re looking at SDGE rates, maybe you could take a look at SCHEDULE EV-TOU and SCHEDULE EV-TOU-2. Check the rates there. It’s separately metered and isn’t subject to the tiered rates. I charge in less than 3 hours, so could easily use the super off peak rate of .19 cents per kWh.

            https://www.sdge.com/clean-energy/ev-rates


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • JimZ: Since that’s not going to happen, why should I waste any time on your nonsensical what-if?
  • JimZ: Funny, Jim Hackett said basically the same thing yesterday and people were flinging crap left and right.
  • JimZ: That and the fact that they could run on gasoline, which was considered a useless waste product back in the...
  • JimZ: Gas turbines are less efficient (more so the smaller you make them,) only like being run at 100% load, and have...
  • JimZ: Oh look, another geek who’s obsessed with the “purity” of a series hybrid.

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States