![\"Subaru](\"https:\/\/www.gannett-cdn.com\/presto\/2021\/08\/31\/PDTN\/c4d44952-4718-4514-b0ef-cf7659197d5b-21MY_Crosstrek_Hybrid_-_Hero.jpg?crop=1294,701,x513,y499&width=660&height=358&format=pjpg&auto=webp\")
<\/p>\nElectrified vehicles have gotten little traction\u00a0with\u00a0Subaru’s off-road, price-conscious customer base, but the company, like its peers, is facing escalating government fines if they don’t make them. After years of dictating mpg numbers to automakers, governments from California to Europe are now mandating what drivetrains automakers use.<\/p>\n
\u201cThe challenge is cost and range for any company trying electrification,\u201d said Michael Reddick, car-line planner for the Subaru Forester SUV, WRX sedan, and BRZ sportscar models, in an interview. \u201cWe\u2019re working through packaging costs and packaging constraints. Whatever (our EV model) is, it will be a Subaru first. It will be able to make it to the trail; it will be able to be used for outdoor adventure.\u201d<\/p>\n
Though its core northwest America demographic is environmentally conscious, Subaru has only brought to market one electrified vehicle, the Crosstrek SUV plug-in hybrid. With 17 miles of range before its gas engine kicks in, the hybrid\u2019s $36,395 sticker price is well above a comparably-equipped, $29,045, gas-powered Crosstrek \u2014 a tough ask for Subaru\u2019s price-aware customers.<\/p>\n
Pairing with Toyota helps Subaru mitigate cost. Other industry players like Mazda (also partnered with Toyota) and Honda (GM) are forming Big Auto partnerships.<\/p>\n
\u201cAutomakers don\u2019t see a lot of volume in EVs in the next several years,\u201d said auto consultant and former Wall Street analyst Joe Phillippi of AutoTrends Consulting. \u201cNot until you can fill an entire auto plant with EV production, then it becomes economical. So the smaller guys have to partner with someone over time.\u201d<\/p>\n
He said\u00a0the partner relationship is symbiotic.<\/p>\n \u201cToyota has made tremendous investments in electrification in the last 20 years. So the partnership helps the big guys, too,\u201d continued Phillippi. \u201cWith a partner on board, Toyota\u2019s piece cost goes down. The big companies need lots of volume to make EVs profitable.\u201d<\/p>\n He said that, given the small market penetration of EVs, the huge investments in electrification would likely not be happening without government regulation. Subaru and other automakers face millions in fines this decade if they do not meet government electrification targets (they have already paid money in emissions credits to Tesla, the only EV-only automaker, in order to avoid fines).<\/p>\n Analysts do not see government\u2019s fixation on global warming regulations going away, therefore companies have to develop business models that can make EVs profitable. Partnerships sharing the costs have become common across the industry beyond the small-big auto tie-ups. Ford, for example, has partnered with VW in Europe while also investing in EV-trucker Rivian here at home.<\/p>\n It\u2019s not the first time that small automakers have paired with their big brethren to pare cost.<\/p>\n Halo sportscars are key products to differentiate small brands like Subaru and Mazda. But, given their low sales volume, they have become increasingly expensive to develop as safety and environmental regulations have grown in recent decades. Developing an all-new platform can cost as much as $1 billion.<\/p>\n In the last decade, Subaru partnered with Toyota to produce the BRZ and 86 sportscars, respectively. Mazda\u2019s signature, fourth-generation MX-5 Miata was co-developed with corporate giant Fiat Chrysler (now part of Stellantis), which produced its own Fiat 124.<\/p>\n Subaru\u2019s Reddick said\u00a0the Subaru BRZ\/Toyota 86 partnership worked well. \u201cWe both know our customers, and we both are strong in motorsports. So it was a natural fit for us to work with Toyota.\u201d A second generation of both cars is coming to market this year and Subaru is developing the Solterra\u00a0\u00a0on a shared platform with Toyota\u2019s bZ4X.<\/p>\n \u201cWithout a partnership, small-volume vehicles like the Miata likely wouldn\u2019t happen,\u201d said IHS Markit senior analyst Stephanie Brinley. \u201cAnd the partnerships have also proven the ability of the companies to work together.\u201d<\/p>\n The pairings, analysts say, also reveal automakers\u2019 uncertainty about an electric future. Partnerships on sportscars after all, are low-volume affairs \u2014 as are EVs so far.<\/p>\n \u201cThe EV market is not here yet. The initial rate of customer acceptance is very small,\u201d said Brinley. \u201cAutomakers are hedging their bets out of concern that there may not be a market there. EV partnerships are a bridge to when there is higher volume.\u201d<\/p>\n IHS predicts that 32% of vehicles in the U.S. market will be electric by 2030. But the gas engine \u2014 particularly with cheap gas expected for decades to come \u2014 has proven resilient against repeated predictions buyers would adopt alternative fuels. (Earlier this year, the U.S. Energy Information Administration projected an average pump price of $3.23 a gallon in 2050.)<\/p>\n Europe, for example, tried to force adoption of diesel-powered engines 25 years ago \u2014 an ambition now abandoned as the continent pushes for all-EVs in the next two decades.<\/p>\n \u201cElectrification is going to be a long transition,\u201d said Brinley. \u201cRegulations are pushing it, but when governments don\u2019t hit their targets, they just push the targets off into the future.\u201d<\/p>\n Until that transition proves real, only Big Auto has the resources to invest in battery plants. Everyone else, says AutoTrends\u2019 Phillippi, is in \u201casset-light mode\u201d while making the gas-powered vehicles customers desire.<\/p>\n Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" The high cost of electric vehicles is driving small automakers into the arms of the big boys. With demand for EVs low, manufacturers like Subaru, Mazda\u00a0and Honda are pairing with larger, more capitalized rivals Toyota and General Motors. The alliances enable smaller producers to meet government electric vehicle regulations and get their feet wet in […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/27881"}],"collection":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/comments?post=27881"}],"version-history":[{"count":1,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/27881\/revisions"}],"predecessor-version":[{"id":27882,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/27881\/revisions\/27882"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=27881"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=27881"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=27881"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Subaru](\"https:\/\/www.gannett-cdn.com\/presto\/2021\/08\/31\/PDTN\/4a33450e-93d8-472a-9f9c-ec6609c8fc84-SubaruEV_Solterra-badge.jpg?width=660&height=440&fit=crop&format=pjpg&auto=webp\"){kind=icon}
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