By on March 27, 2020

News arose yesterday that General Motors’ and Ford Motor Company’s battle plans rely heavily on SUV and pickup sales, rather than electric vehicles. Details of the corporate strategies, first shared by Reuters, soon circulated through the media, with many outlets upset that the pair seem to have oversold the role electrification will play in their respective lineups through 2026. One wonders how they could possibly be this surprised.

Using data issued to parts suppliers from the two automakers, AutoForecast Solutions predicted North American production of SUV models from GM and Ford will outpace the assembly of traditional cars by more than eight to one in 2026. Roughly 93 percent of those models are expected to be dependent upon gasoline. Meanwhile, Reuters compared the manufacturers’ strategy against Tesla — a company that only exists for the explicit purpose of selling EVs and has never assembled a gas-powered automobile — as if all manufacturers are equal in scope and cater to the same type of customers. 

From Reuters:

Internal production plans from other industry sources seen by Reuters support AutoForecast’s numbers, which show GM and Ford expect to produce about 320,000 pure electric vehicles — powered solely by a battery — in North America in 2026. That is nearly 10 times the 35,000 they have planned to build in 2020, but fewer than the 367,500 Tesla delivered last year.

It is only a fraction of the 5.2 million SUVs and pickups that GM and Ford expect to make in North America in 2026, according to the AutoForecast data, up 14 [percent] from 4.6 million SUVs and pickups in 2019. SUVs and pickups will account for about 87 [percent] of vehicles made by GM and Ford in the region in 2026, compared with about 82 [percent] last year.

Executives at GM and Ford told Reuters in interviews they are serious about launching more electric vehicles in the United States in the coming years, but they are concerned about getting too far ahead of mass-market demand.

None of them denied the production estimates, though.

Interestingly, Reuters published an article at exactly the same time as its piece about Detroit snubbing EVs for 2026 to highlight the large number of EVs Ford and GM plan to deliver over the next three years. Blue Oval has the Mustang Mach-E, an all-electric F-Series, Transit EV, and at least one electric model for the Lincoln brand. Meanwhile, the General wants to refresh the Chevrolet Bolt and give it a crossover cousin while it works on EV products for Cadillac, the upcoming Hummer, and several other electric models.

GM also has a new, modular electric architecture and proprietary battery tech to bestow upon its new EVs.

That shows significant commitment to electrification (development costs money), though it may also help us understand why so many outlets seem shocked. Unlike FCA, which never seemed overeager when it came to electrification, Ford and GM have been pushing the zero-emissions concept for years. Nearly every press release issued after 2015 discussed an imminent metamorphosis, where they would stop being automakers and become “mobility companies” offering self-driving vehicles, novel data-based services, and dozens of emission-free cars running on electricity. But when it comes to shades of green, the color of money always takes precedent.

The logistics simply didn’t cooperate. Autonomy turned out to be a costly, bald-faced lie as the industry began to realize it’s actually ludicrously difficult to teach a car to drive itself safely. Meanwhile, the market for EVs hasn’t matured at a pace to make them the dominant product for anyone other than Tesla. Frankly, the margins for SUVs are so good that it’s hard for us to say anything other than sticking with them seems prudent from a business standpoint — especially if the alternative is electric cars. Unfortunately, both companies (especially GM) made it sound like they had already committed themselves to total electrification.

That’s on them, even if people probably should have taken those claims with a colossal-sized grain of salt. AutoForecast admits that pursuing EVs at the expense of more profitable segments is silly.

“GM and Ford understand that buyers want more SUVs and trucks, but they’re also trying to play to Wall Street, which thinks the future is all about electric vehicles,” Sam Fiorani, vice president of global vehicle forecasting at AutoForecast, explained. “The Detroit automakers would love to get a little of that Tesla magic and money.”

So they build a few EVs in an attempt to woo investors. Tech talk is good for stock performance; manufacturing vehicles Americans actually want to buy in large volumes is good for revenue. And it helps the automakers prepare for the day the pendulum swings to better favor EVs, since they’re still learning what does/doesn’t work. Meanwhile, EVs will help the companies remain emissions compliant until the fuel rollback arrives… assuming that’s still on.

Chide GM and Ford (in addition to a bevy of other manufacturers) for fibbing in their press releases and overhyping electrification like they did with self-driving. They absolutely deserve it. But don’t be shocked that they did so — they’re gigantic corporations interested in making money, not benevolent entities bent on environmentalism while operating at a loss. What’s the old saying? Fool us once, shame on you; fool me twice, shame on our stupid asses.

[Image: General Motors]

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45 Comments on “Why Is Everyone So Surprised Detroit Isn’t Prioritizing EVs?...”

  • avatar

    Take the title, now make it state the opposite

    Okay, perfect, now that’s what I’ve been trying to figure out for the past year or so. Seriously, tiny market, low returns, huge investment requirement, almost no demand. FCA for instance, would see better returns putting the 5.7L in the Wrangler and putting an $8,000 premium for the option than they would building the upcoming EV 500.

    • 0 avatar

      BINGO!!!! A Hemi Wrangler would be a license to print money. When a slew of independent shops are making an absolute killing on Hemi swaps costing as much as the Jeeps. HEMI upgrade is a couple thousand on the Ram. It wouldn’t be much different to upgrade the wrangler. Regulatory B.S. written by cube-dwelling bean counters who don’t buy cars is what’s holding this up.

  • avatar
    R Henry

    Nothing better to get the comment thread fireworks going than a piece on electric cars….well, except for a piece about oil brand preference…..or service interval frequency…..

    Let the keyboards burn on 1….2….3!

  • avatar

    I feel confident that Nancy Pelosi will make this right.

  • avatar

    I guess people are surprised because everyone saw Harley Davidson follow the money with old technology, right up until the money literally started aging out of buying things?

    If GM and Ford don’t thing ICE cars will be banned in many places in 2026, they’re the ones in for a nasty surprise.

    • 0 avatar

      GM has historically assumed everything would stay in stasis. Looks like they’re going to do it yet again. Hope our tax money doesn’t go to bail them out, again.

      • 0 avatar

        Nobody gets fired for advocating stasis.

        The nail that sticks out gets pounded down.

        The Japanese/Koreans/Chinese will never make cars that compete with ours.

        Too big to fail.

      • 0 avatar

        I hope the nail that gets pounded down is GM in 5 years. No more bailouts! Let them fail if they misread the market. We’ve put up with their myopic c— for the last 50 years. If they’re reading it right and Americans do drive SUVs and CUVs forever and ever, good for them.

        I do think a near term problem is going to be the curtailing of their Chinese supply chains and the retraction of the Chinese auto market. That’ll keep their hands full for the next few years. Then, if the market shifts here, they will be in need of a huge infusion of our cash. Let’s hope whoever is in office at that time has the courage to say no.

  • avatar
    SCE to AUX

    No surprise here.

    Everything in the article is true. The non-Tesla mfrs simply aren’t all-in, and the sure profits from conventional vehicle trumps the probable losses from EVs every time.

    They’re not going to do anything they aren’t forced to.

    But it’s a self-fulfilling prophesy, also. Nobody (except maybe VW) has a chance of catching Tesla, which just started turning profits in 2019 after 16 years in business. So why bother, if they’re not forced to?

    BTW, I don’t think they *should* be forced to go electric. There is room in the market for variety.

    • 0 avatar

      They shouldn’t be forced, but by not having a well rounded portfolio of products they are vulnerable to changes in the marketplace. But short term, oil is going to be cheaper than it should be thanks to the Saudi’s new model which is going to cause a crash in energy prices. Detroit will bang out the guzzlers which have a huge profit margin. They will make big bucks as Americans turn to inefficient vehicles because gas will be $1.70 a gallon. But at some point, the Saudis will be able to ratchet the price back up. By then the more expensive producers like America will have to restructure and restart extraction that was shut down because it was no longer competitive. Gas prices will steadily rise and buyers, getting out of their 16 MPG vehicle are going to turn to those who make something more in tune with $3.80 a gallon pricing. Sound familiar? 1973, 1981…those who fail to learn from history…

      Nothing wrong with making those trucks and SUVs but if that’s all you make, the future is not going to look too good. Just when that “future” hits is the big question…

    • 0 avatar

      It looks to me like they know that there isn’t room in the market for several manufacturers with complete line-ups. So they’re presenting enough products to be kinda-sorta present, and to keep abreast of the tech… but they’re not counting on serious sales.

  • avatar

    “but they’re also trying to play to Wall Street, which thinks the future is all about electric vehicles”

    It is seriously crazy how much Tesla’s stock performance and FOMO has warped this thinking beyond any rational basis. EVs may be the inevitable future (I hope not) but the timescale is decades, not next quarter or even 5 years from now. The average vehicle age is now close to a dozen years, and EV sales are under 2% of the market. Even leaving aside any virus effects on the economy, simple math implies decades to turn over the fleet even with exponential growth in EV sales (highly dubious without significant battery breakthroughs IMO). GM and Ford are absolutely doing the right thing here.

    • 0 avatar

      @jack4x: “without significant battery breakthroughs”

      Those battery breakthroughs are in the process of getting ready to start coming off the production lines. Teslas Maxwell technology is probably a little more than a year from rolling off the line, Toyota has finished their solid-state battery design and is a few years from mass production. GM has a decent technology as well and that’s close to rolling off the line. The new battery technology is lighter in weight, more durable, and costs less to produce.

      They aren’t in production yet, but once they do, there will be a bigger shift in the market towards EVs. After you’ve driven an EV, an ICE just doesn’t cut it. I’m into performance and the best way to get it is from an EV. I know there are a lot of people on the site that don’t care about performance and they’re willing to put up with the sluggishness of an ICE drivetrain, but I just can’t go back to that.

      • 0 avatar

        Didn’t you state you owned a series of 4 cylinder econo cars? I would imagine anything would be an improvement from the bottom.

      • 0 avatar

        Those battery technologies are minor improvements in capacity. To make electric propulsion truly viable requires a Moore’s law style improvement.

        • 0 avatar

          @mbella: “Those battery technologies are minor improvements in capacity.”

          Minor improvements? Seriously? The EV1 was 90 kWh/kg. The first Leaf was around 140 Wh/kg. Current battery technology is around 260 to 300 Wh/kg and the new stuff seems to be at least 500 Wh/kg.

          The improvement of what’s rolling off the line now is three times better than the EV1 and double that of the original Leaf battery. How is that a minor improvement? The stuff coming within the next 2 years might be double what we have now. Starting to sound a little like Moore’s law.

      • 0 avatar

        I’ve driven multiple Teslas all the way up to a 100D and own a Dodge Viper. I like to think I speak with some experience on fast cars. For some of us, there is more to performance than gimmicky, non repeatable acceleration from a standing start.

        And as I said, even with the dubious assumption of exponential growth, it will be decades before the fleet is turned over.

        I’ve also been hearing about the “next big thing in batteries” since the EV1. There’s been steady improvement but nothing of the magnitude that would lead the EV skeptical to forgot about the massive trade offs in range, driving experience, recharging time, and TCO vs today’s gas vehicles. Will that change in the future? Maybe, and if it does I’ll consider an EV with an open mind. As of now, I’ve kept an open mind and found EVs wanting.

      • 0 avatar

        ‘Performance’ is more than numbers on a piece of paper. It’s also the full visceral experience and connection. An electric pod silently emailing itself to 60mph in a few seconds isn’t any fun. Id rather play video games at that point.

        To the average consumer who drives ravcammasscapes, none of that matters. What DOES matter is convenience and cost of ownership. And the few $$ saved in fuel costs longterm is an illusion since you pay FAR out the @$$ for the privilege.

        • 0 avatar

          @moparrocker74: You’re totally right, it’s more than just numbers. Torque and instantaneous response is important. All-wheel drive electronically controlled through the motors resulting in cornering and acceleration beyond what you can get from mechanical systems. Performance EVs aren’t that silent either. You get a lot sound out of multiple motors. The convenience of unattended home fueling is far superior to dealing with having to go to a gas station. Compare the total cost of ownership of any ICE car capable of 3.0 seconds 0-60 acceleration to a Model 3 Performance.

          • 0 avatar

            Driving a friend’s Leaf had very appealing “performance” at the other end of the driving experience in the D.C. area; gridlocked “rush hour” travel. The one-pedal driving mode when you’re going from 0 to 20 and back again, 50 times in a mile was less stressful with instant linear torque and regen deceleration. His car was the best vehicle I’ve driven for that nasty work. Let commuters experience that for a week and they’ll sell themselves.

          • 0 avatar

            To me, performance is safety, quiet, reliability, and efficiency. Not having to stand out in the cold at a gas pump sounds nice, too. G forces do not impress me.

          • 0 avatar
            Carlson Fan

            “Let commuters experience that for a week and they’ll sell themselves.”

            Nothing better than the Volt when I’m dealing with stop & go rush hour traffic or driving in downtown Minneapolis/St. Paul. Effortless!

  • avatar

    This country is too big… It’s been good to see Ford and others bring back the Hybrid compact SUV…

    It’s become the defacto standard family car, so it’s a huge gain in efficiency just by making good CUV hybrids…

    Versus the Bay Area Telsa owners who have to stop for a charge in Truckee on the way to Reno… you can do it, but now you’re down to Trailways ETA’s

    the big three need to further ramp up hybrids… New sonata gets 50 mpg

  • avatar

    So GM and Ford are smarter than we thought.

  • avatar

    These companies are being run by people more interested in PR wins than doing the right thing for the company. Everyone knows that the charging infrastructure is just not there for EVs, and there aren’t enough people out there willing to park behind some random grocery store for several hours just to juice their cars.

  • avatar

    I can’t see a hybrid. Twice as many drive trains to pay for and break. They don’t benefit me on my mostly rural driving.

    Plug in hybrid, yeah. I can drive electrically to town, charge at home, then go on a trip like it’s a normal car.

    Pure EVs will have to wait a couple years for solid state batteries. Those sold today will be worthless, like old Leafs.

    • 0 avatar

      EVs are fine as a 2nd car, but a disaster as an only car, the car companies know this and aren’t about to put all their eggs in that basket. For once I agree with them

  • avatar

    After seeing a P85 do a hard launch from a stoplight… I got interested in buying a Tesla. Seeing that kind of supercar performance, nothing I could touch even with my low 5sec car.

    I’ve started saving the $$$ to put a sizeable down payment on a Model 3 Long Range AWD. It will be perfect for what I have in mind – a lot of city driving with a few longer Michigan trips to Lansing or Ann Arbor.

    For the rarer longer drives, where time is of the essence, I’ll still have my 6-speed manual V6 Mustang, which is still a lot of fun to drive. The crackle of the 3.7L and the rev-happy engine (with my aftermarket 3.55 gears) makes for a pretty engaging car.

  • avatar

    The real problem with BEVs is that even if somebody develops a really fast charging battery (or supercapacitor), you have to charge it and that takes joules. That energy has to be delivered somehow, and that takes power over time. Less time, more power needed. How many megawatts are you comfortable plugging in? How big do power lines have to be? It’s scary.

    The other problem is you have to carry batteries around whether they’re charged or not. Fuels get burned up and exhausted.

  • avatar

    Most of us knew all along that EV investment was tantamount to a Ponzi scheme. Outside the success of Tesla, there is simply no demand for electric vehicles. It is not surprising then to find out the Bolt is GM’s worst-selling vehicle. I also envision EV Hummer’s piling up on dealership lots. GM is living in a fool’s paradise if they think they will even sell 10,000 EV Hummer’s annually. The unfortunate fallout from this obsession with EVs is that Detroit has pretty much handed the passenger car market to the competition. Remember, after SUVs, the passenger car market is the second most popular market segment. Detroit’s future looks to be based on selling Truck and SUVs with a few poor-selling EVs thrown in the mix. It is doubtful GM will ever sell close to 50,000 EVs a year. They would be better off selling nearly 300,000 Cruzes and Malibu’s a year.

    • 0 avatar

      The Bolt is GM’s worst selling vehicle because it’s kind of a $15-20k car at $30-40k pricing, competing against the most desirable car in the $40k segment at $40k. Not a big mystery. And I say this as a fan of the Bolt.

  • avatar

    It’s kind of funny that since gasoline prices have plummeted over the past few years, EV’s big selling point has become performance. I mean beyond saving the planet one fifty thousand dollar car at a time.

    I think that the truth about performance cars however is that whether ICE or EV we have reached the fin de siècle. 300 horsepower cars are common; 500 horsepower cars are numerous; 750 horsepower cars come with factory warranties; 1,000 horsepower cars are available to those to whom such numbers still matter. There’s not much farther to go in that direction regardless of the motive force: additional power is pretty much unusable. Top speeds the same and acceleration figures, well there’s little real world difference between a car capable of 4 second 0-60 times and one which can do it in 3 seconds.

    I believe that there is a growing and permanent niche for EV’s and I am all in favor of them if people want them. Certainly they make sense in Los Angles for obvious reasons, and are little less practical than ICE vehicles in many other places. In my personal situation an EV would work perfectly well. Still, there’s no advantage to me to choose one, and thus no incentive to switch to one.

    I think that for at least the next 20 years or so this will continue to be the case for the majority of car buyers. Certainly the number of buyers will grow but I have trouble envisioning EV’s claiming more than 20 percent or so of the total market during that time frame. To be fair, I have a poor track record of predicting the success of new trends and technologies, but even given price equality I don’t see enough advantages for them to completely conquer the marketplace. My wife, for example doesn’t even like to pump her own gas. I can’t see her being thrilled with having to remember to plug in the charging cord every time she parks her car in the garage. Daily refueling won’t strike her as an improvement over weekly refueling.

    So once the novelty of being the hot new thing wears off, I think the market growth will slow. Tesla will continue to be popular as ‘the Cadillac of our times’, but electric Fords and Chevys will remain Fords and Chevys in terms of status, and won’t see Tesla level sales over the long run. See: Volt

  • avatar

    Update, March 27, 2020:

    Since we now live in a planned economy, customer choice is pretty much irrelevant. Bring on the EV’s?

  • avatar

    In the new world reality, there is going to be more price sensitivity, premium products are going to find it hard going. A BEV is a 30% upcharge over an equivalnt size ICE. Gasoline is goign to be really cheap for a while.

    Auto manufactuers are going to need to rethink product development costs and cycles. Plus no one really acres about C02, there are bigger issues like staying alive and jobs.

    In general no one is going to want to take mass transit, or live where that is a requirement, so people are going to need cars to get about, and probably many will buy less expensive ones for utility.

    What BEVs may have going for them is huge make work infastructure projects may just build that charging network sooner rather than later.

    I dont see nay poltician making laws that drive up consumer costs anywhere in the near future, so there will be no BEV mandate anytime soon.

    Maybe when there is a covid vaccine and broad economic recovery the BEV can be revisited. Untill then market forces and costs will rule.

    Europe may be different to here and may stick with their BEV mandates.

  • avatar

    Ive said it about a jillion times: a great item pretty much sells itself, it doesn’t need bribes, eco-shaming, regulatory pressure, tax credits or any other flim flammery to find a willing buyer. Even with all of this, electric cars are a tiny little speck with nowhere to go. Meanwhile, despite higher insurance and operating costs, as well as outright theft by way of gas guzzler penalties, musclecars still sell at a profit in steady numbers. There ya go.

  • avatar

    Finally, everyone is seeing reality. EVs will be a complete failure for both GM and Ford. The question is what is going to happen to the hapless workers creating and building these unsold EVs. The simple answer is most will lose their job, and the plants producing these vehicles will close.

    GM has not figured out the basic rudiments of mathematics. They were at their peak selling around 160,000 Cruzes a year. This is in contrast to the 16,000 Bolts sold in 2019. So it would take a decade for the Bolt to equal the Cruzes in sales! GM has never had an EV break the annual 20,000 sales barrier. As I said before the Bolt is GM’s worst-selling vehicle.

    What would Toyota do in this situation? Well, they would probably build a few experimental electric Cruzes to see how they sell. In a way, they are already doing this with their hybrids. Trust Toyota to get it right and GM to make a total mess of things.

    Let us stop following GM’s foolish electric vehicle initiative.

  • avatar
    Funky D

    Is it too simplistic to state that without an extensive charging infrastructure, EVs are a short road to nowhere? Few can afford to spend a truck-like sum on a EV that has limited use beyond an in-town commuter or grocery getter.

    • 0 avatar

      @FunkyD: With GM’s current discounts, you can get a Bolt with 259 mile range for about $28k where I live. It’s also car with a 0-60 time of 6.3 seconds. That’s better than some C3 and C4 Corvettes. So, exactly how is a car with a 259-mile range limited to an in-town commuter or a grocery getter? Charging infrastructure isn’t bad either. In almost 100k miles of EV driving, I haven’t had a problem.

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