{"id":30700,"date":"2023-03-24T17:18:14","date_gmt":"2023-03-24T21:18:14","guid":{"rendered":"https:\/\/henrypayne.com\/?p=30700"},"modified":"2023-03-24T17:18:14","modified_gmt":"2023-03-24T21:18:14","slug":"payne-how-different-brands-are-navigating-to-an-ev-mandated-future","status":"publish","type":"post","link":"https:\/\/henrypayne.com\/index.php\/2023\/03\/payne-how-different-brands-are-navigating-to-an-ev-mandated-future","title":{"rendered":"Payne: How different brands are navigating to an EV-mandated future"},"content":{"rendered":"

San Diego<\/em>\u00a0\u2014 From LED light bulbs and water-efficient washing machines to electric vehicles, government regulators are directing manufacturers on the products they must build.<\/p>\n

In a U.S. auto market where more than 90% of new car sales are vehicles powered by an internal combustion engine, different legacy brands are taking different routes toward a government-mandated, all-electric future in 2035. Large automakers like General Motors Co. are all in on EVs \u2014 shifting its brands to a single, Ultium battery platform and charging Cadillac, for example, with selling only battery-powered models by 2030. Smaller brands like Honda, Subaru and Dodge, however, are taking more cautious, incremental approaches given the soft customer demand for EVs.<\/p>\n

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The price of not electrifying their fleets is steep as Dodge\u2019s\u00a0whopping $711 million fine<\/a>\u00a0for missing emissions targets in 2022 proved, though consumers are largely unaware of the pressures the industry is under. And in the world\u2019s most diverse auto market, manufacturers must find the electrification strategy that best squares the circle between government demands and their customers\u2019 needs.<\/p>\n

\u201cThe pressure is on manufacturers as governments force them to electrification, but it\u2019s a three-leg stool: governments, automakers, consumers,\u201d said Matt DeLorenzo, a veteran industry analyst and author of \u201cHow to Buy an Affordable EV.\u201d \u201cAnd if the consumer isn\u2019t there, then the stool isn\u2019t going to stand.\u201d<\/p>\n

Honda and other automakers were the beneficiaries of the last of government fuel regulations in the 1970s that penalized Detroit Three automakers in particular for selling big cars. Japanese-made compact imports from Honda and Toyota gave those automakers a foothold in the market that has expanded ever since.<\/p>\n

But new government mandates forcing EVs, insiders say, favor the Detroit Three, whose huge pickup truck fleets are often used in short-haul, high-torque situations where EVs excel.<\/p>\n

\u201cIt\u2019s going to be different because this time everyone is on the same footing. The question is: where is the market going to go next? Are people going to still want trucks? I think they are,\u201d DeLorenzo said. \u201cThat favors the domestics.\u201d<\/p>\n

\"GM<\/p>\n
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EVs make less sense to the single-car households and apartment dwellers that buy, say, Honda Accords and Civics and CR-V SUVs. So Honda sees hybridization as its bridge to electric cars.<\/p>\n

The all-new Accord, for example, will offer only a hybrid, battery-gas powertrain option in addition to its base internal combustion engine \u2014 shelving a higher-horsepower, 2.0-liter turbo-4. The turbo-4 and hybrid each accounted for about 10% of Accord sales, but to avoid massive EPA fines in 2026, Honda is hoping that 50% of buyers will choose the hybrid option.<\/p>\n

\u201cIt fits where we\u2019re going to electrification. As great as the turbo-4 engine was \u2014 as far as managing restrictions and government regulations, it doesn\u2019t fall in line to where we\u2019re going,\u201d Accord product manager Dan Calhoun said at the 2024 model\u2019s media test here in southern California. \u201cThis is a bridge towards electrification. We see that coming, so we (offer) four hybrid trims: Sport, EX-L, Sport-L and Touring.\u201d<\/p>\n

\"Honda<\/p>\n
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Honda\u2019s approach takes a step further as Calhoun and his team have engineered the hybrids to behave like pure EVs. They can run on battery power alone up to 25 mph and then drivers can use regen paddles to brake the car with the electric motor, just like a Tesla.<\/p>\n

GM is putting all its electric eggs in the Ultium EV platform, but even the General is hedging its bets by committing to a\u00a0new generation of V-8-powered vehicles<\/a>.<\/p>\n

\u201cGM says they are going all-EV, but the fact that they are investing $1 billion in a new generation V-8 engine shows that trucks will be a big part of their sales plan,\u201d said analyst DeLorenzo. \u201cThey need ICEs to deliver the money they need to stay in business.\u201d<\/p>\n

Trucks are key to the automaker\u2019s EV transition as they account for the bulk of the company\u2019s profits. Like crosstown rival Ford Motor Co., GM can also use EV sales credits to balance its popular ICE vehicles.<\/p>\n

\u201cGM is trying to appease the government. They need to generate EV credits in order to offset whatever fines they would get for not meeting 2026 (emissions targets),\u201d DeLorenzo said. \u201cI think that\u2019s the thing that is often overlooked. If you generate credits from EVs, that can help you continue to sell trucks and Corvettes.\u201d<\/p>\n

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Ford was first to benefit from EV versions of popular ICE nameplates. The company says sales of its electric Mustang Mach-E SUV and F-150 Lightning allowed it to introduce a new generation of V-8-powered Mustangs as well as a V8-powered F-150 Raptor that customers have been pining for.<\/p>\n

By contrast, Stellantis NV\u2019s Dodge performance brand was late to the EV credits game. Dodge\u2019s V-8-powered Hellcat Challengers and Chargers may have broken the Internet, wowed buyers and displaced the iconic Mustang as America\u2019s best-selling sports car \u2014 but they also cost the company millions in government fines.<\/p>\n

In their place comes the 2023 Hornet, the brand\u2019s first SUV since 2012 \u2014 and the first electrified Dodge.<\/p>\n

Dodge threw in the towel on its popular Challenger\/Charger line, which will cease production later this year. \u201cIt\u2019s time for a transition,\u201d Dodge sales chief Matt MacAleer said at the Hornet\u2019s media debut in Asheville, North Carolina. \u201cOur transition to electrification has begun.\u201d<\/p>\n

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Dodge predicts the $41K plug-in hybrid R\/T will split Hornet sales 50\/50 with the standard $31K gas-powered GT model. Together with the brand’s upcoming first EV, the Charger Daytona SRT Banshee, Dodge hopes it will be able to meet government standards.<\/p>\n

\u201cOur customers want the flexibility of a battery and gas engine as we transition to electric vehicles,\u201d said Hornet product manager Fernando Fernandez.<\/p>\n

Says analyst DeLorenzo: \u201cDodge is buying time with EVs. They are pursuing technology that might improve fuel economy where they might be able to reintroduce a V-8 at some point. I think that what threw them for a loop is that, during the Trump administration, they got some breathing room on emissions and all that breathing room has been taken away.\u201d<\/p>\n

\"Subaru<\/p>\n
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Where Dodge faces an uphill battle convincing its ICE enthusiasts to go electric, Subaru would seem to have the perfect customer base for EVs.<\/p>\n

Environmentally conscious and active outdoors, the typical Subaru buyer fits the profile of an EV tree-hugger. Yet the brand has struggled to make sense of costly, range-challenged EVs \u2014 contrary to the brand\u2019s reputation for affordable vehicles that can hike anywhere.<\/p>\n

\u201cWe have a lot of customers who want 500 miles of range, which is why we give them a big (16.6-gallon) fuel tank,\u201d Garrick Goh, car line manager for the subcompact SUV segment\u2019s best-selling Crosstrek, said in Palm Springs. \u201cThey go places where there are not just no EV chargers, but no gas stations.\u201d<\/p>\n

Goh acknowledged the difficulty of meeting 2026 federal regs, but said Subaru\u2019s larger concern is so-called Section 177 states that have adopted California\u2019s draconian emissions mandates \u2014 states like Maine, Massachusetts, New York, Oregon, Vermont and Washington, where Subarus sell well.<\/p>\n

The Japanese maker has one battery-powered vehicle in its lineup, the Solterra SUV, which starts at $45K, and one hybrid, the low-volume $38K Crosstrek plug-in, priced well above its $26K gas counterpart. When Crosstrek was remade this year, there were few changes to its four-cylinder ICE drivetrains.<\/p>\n

Goh said the company sees the electrification opportunity not in hybrids, but in pure EVs that gain more credits for the brand.<\/p>\n

\u201cEVs gain six times more credits in 177 states than plug-in hybrids,\u201d he said. \u201cSo we\u2019re focusing on EVs like the Solterra. EV is the end game because eventually we\u2019re all going EV.\u201d<\/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":"

San Diego\u00a0\u2014 From LED light bulbs and water-efficient washing machines to electric vehicles, government regulators are directing manufacturers on the products they must build. In a U.S. auto market where more than 90% of new car sales are vehicles powered by an internal combustion engine, different legacy brands are taking different routes toward a government-mandated, […]<\/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\/30700"}],"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=30700"}],"version-history":[{"count":1,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/30700\/revisions"}],"predecessor-version":[{"id":30701,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/30700\/revisions\/30701"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=30700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=30700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=30700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}